IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v94y2023i1p191-219.html
   My bibliography  Save this article

Human development and decentralization: The importance of public health expenditure

Author

Listed:
  • Ronald Miranda‐Lescano
  • Leonel Muinelo‐Gallo
  • Oriol Roca‐Sagalés

Abstract

In this article, we empirically analyze the impact of central and subnational government spending on human development in a sample of 57 developed and developing countries over the period 2000–18. Specifically, we focus on the effects of health and education public expenditure on the Human Development Index (HDI) and its dimensions (life expectancy, education, and income). Applying data panel analysis, our empirical evidence shows the importance of central and subnational government health expenditure positively impacting on HDI and each of its components, while in the case of the education expenditure, this positive effect is only confirmed on the educational dimension of HDI. Our study shows how governments can stimulate human development, improving the well‐being of citizens, by allocating more resources to healthcare through the different administrative levels.

Suggested Citation

  • Ronald Miranda‐Lescano & Leonel Muinelo‐Gallo & Oriol Roca‐Sagalés, 2023. "Human development and decentralization: The importance of public health expenditure," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 191-219, March.
    • Handle: RePEc:bla:annpce:v:94:y:2023:i:1:p:191-219
    DOI: 10.1111/apce.12373
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/apce.12373
    Download Restriction: no
    File URL: https://libkey.io/10.1111/apce.12373?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John Nixon & Philippe Ulmann, 2006. "The relationship between health care expenditure and health outcomes," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(1), pages 7-18, March.
    2. François Bourguignon, 2015. "Revisiting the Debate on Inequality and Economic Development," Revue d'économie politique, Dalloz, vol. 125(5), pages 633-663.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    4. John Anyanwu & Andrew E. O. Erhijakpor, 2009. "Health Expenditures and Health Outcomes in Africa," African Development Review, African Development Bank, vol. 21(2), pages 400-433.
    5. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 249-288, June.
    6. Cristian F Sepulveda & Jorge Martinez-Vazquez, 2011. "The Consequences of Fiscal Decentralization on Poverty and Income Equality," Environment and Planning C, , vol. 29(2), pages 321-343, April.
    7. Besley, Timothy & Smart, Michael, 2007. "Fiscal restraints and voter welfare," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 755-773, April.
    8. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    9. Falch, Torberg & Fischer, Justina A.V., 2012. "Public sector decentralization and school performance: International evidence," Economics Letters, Elsevier, vol. 114(3), pages 276-279.
    10. Robalino, David A. & Picazo, Oscar F. & Voetberg, Albertus, 2001. "Does fiscal decentralization improve health outcomes? - evidence from a cross-country analysis," Policy Research Working Paper Series 2565, The World Bank.
    11. Barankay, Iwan & Lockwood, Ben, 2007. "Decentralization and the productive efficiency of government: Evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1197-1218, June.
    12. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    13. Margit Tavits, 2007. "Clarity of Responsibility and Corruption," American Journal of Political Science, John Wiley & Sons, vol. 51(1), pages 218-229, January.
    14. Viktor Vanberg & Wolfgang Kerber, 1994. "Institutional competition among jurisdictions: An evolutionary approach," Constitutional Political Economy, Springer, vol. 5(2), pages 193-219, March.
    15. Gerring, John & Thacker, Strom C., 2004. "Political Institutions and Corruption: The Role of Unitarism and Parliamentarism," British Journal of Political Science, Cambridge University Press, vol. 34(2), pages 295-330, April.
    16. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    17. Y. Yolanda, 2017. "Analysis of Factors Affecting Inflation and its Impact on Human Development Index and Poverty in Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 38-56.
    18. Belal Fallah & Mark Partridge, 2007. "The elusive inequality-economic growth relationship: are there differences between cities and the countryside?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(2), pages 375-400, June.
    19. Anila Channa & Jean-Paul Faguet, 2016. "Decentralization of Health and Education in Developing Countries: A Quality-Adjusted Review of the Empirical Literature," The World Bank Research Observer, World Bank, vol. 31(2), pages 199-241.
    20. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1203-1250.
    21. Frederick Solt, 2020. "Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 101(3), pages 1183-1199, May.
    22. Adeniyi Jimmy Adedokun, 2017. "Foreign Aid, Governance and Economic Growth in Sub-Saharan Africa: Does One Cap Fit All?," African Development Review, African Development Bank, vol. 29(2), pages 184-196, June.
    23. Emanuele Baldacci & Maria Teresa Guin-Siu & Luiz De Mello, 2003. "More on the effectiveness of public spending on health care and education: a covariance structure model," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(6), pages 709-725.
    24. Tristan Canare, 2021. "Decentralization and Development Outcomes: What Does the Empirical Literature Really Say?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 237(2), pages 111-151, June.
    25. Andreas P. Kyriacou & Oriol Roca-Sagalés, 2019. "Local Decentralization and the Quality of Public Services in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 755-776, September.
    26. Filmer, Deon & Pritchett, Lant, 1999. "The impact of public spending on health: does money matter?," Social Science & Medicine, Elsevier, vol. 49(10), pages 1309-1323, November.
    27. Rashid Mehmood & Sara Sadiq, 2010. "Impact of Fiscal Decentralisation on Human Development: A Case Study of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 513-530.
    28. repec:hal:pseose:halshs-01307779 is not listed on IDEAS
    29. Mohammad Hossein Setayesh & Abbas Ali Daryaei, 2017. "Good governance, innovation, economic growth and the stock market turnover rate," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(7), pages 829-850, October.
    30. Dahlum, Sirianne & Knutsen, Carl Henrik, 2017. "Do Democracies Provide Better Education? Revisiting the Democracy–Human Capital Link," World Development, Elsevier, vol. 94(C), pages 186-199.
    31. David Stasavage, 2005. "Democracy and Education Spending in Africa," American Journal of Political Science, John Wiley & Sons, vol. 49(2), pages 343-358, April.
    32. Sudhir Anand & Amartya Sen, 2000. "The Income Component of the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 1(1), pages 83-106.
    33. Iana Paliova & Robert McNown & Grant Nülle, 2019. "Multiple Dimensions of Human Development Index and Public Social Spending for Sustainable Development," IMF Working Papers 2019/204, International Monetary Fund.
    34. Gupta, Sanjeev & Verhoeven, Marijn & Tiongson, Erwin R., 2002. "The effectiveness of government spending on education and health care in developing and transition economies," European Journal of Political Economy, Elsevier, vol. 18(4), pages 717-737, November.
    35. Antonis Adam & Manthos Delis & Pantelis Kammas, 2014. "Fiscal decentralization and public sector efficiency: evidence from OECD countries," Economics of Governance, Springer, vol. 15(1), pages 17-49, February.
    36. Sudhir Anand and Amartya Sen, 2000. "The Income Component of Human Development Index," Human Development Occasional Papers (1992-2007) HDOCPA-2000-01, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    37. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    38. Li-Lin Liang & Andrew J Mirelman, 2014. "Why Do Some Countries Spend More for Health? An Assessment of Sociopolitical Determinants and International Aid for Government Health Expenditures," Health, Nutrition and Population (HNP) Discussion Paper Series 88182, The World Bank.
    39. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June.
    40. Liang, Li-Lin & Mirelman, Andrew J., 2014. "Why do some countries spend more for health? An assessment of sociopolitical determinants and international aid for government health expenditures," Social Science & Medicine, Elsevier, vol. 114(C), pages 161-168.
    41. Ines A. Ferreira & Rachel M. Gisselquist & Finn Tarp, 2021. "On the impact of inequality on growth, human development, and governance," WIDER Working Paper Series wp-2021-34, World Institute for Development Economic Research (UNU-WIDER).
    42. Nadir Habibi & Cindy Huang & Diego Miranda & Victoria Murillo & Gustav Ranis & Mainak Sarkar & Frances Stewart, 2003. "Decentralization and Human Development in Argentina," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 4(1), pages 73-101.
    43. Devdatta Ray & Mikael Linden, 2020. "Health expenditure, longevity, and child mortality: dynamic panel data approach with global data," International Journal of Health Economics and Management, Springer, vol. 20(1), pages 99-119, March.
    44. Rajkumar, Andrew Sunil & Swaroop, Vinaya, 2002. "Public spending and outcomes : does governance matter?," Policy Research Working Paper Series 2840, The World Bank.
    45. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    46. David Castells‐Quintana & Vicente Royuela & Fabian Thiel, 2019. "Inequality and sustainable development: Insights from an analysis of the human development index," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(3), pages 448-460, May.
    47. Dalibor S. Eterovic & Cassandra M. Sweet, 2014. "Democracy and Education in twentieth-century Latin America," Economics and Politics, Wiley Blackwell, vol. 26(2), pages 237-262, July.
    48. Pedro Cunha Neves & Sandra Maria Tavares Silva, 2014. "Inequality and Growth: Uncovering the Main Conclusions from the Empirics," Journal of Development Studies, Taylor & Francis Journals, vol. 50(1), pages 1-21, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Miranda-Lescano, Ronald & Muinelo-Gallo, Leonel & Roca-Sagales, Oriol, 2024. "Human development and inequalities: The importance of social public spending," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 363-377.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miranda-Lescano, Ronald & Muinelo-Gallo, Leonel & Roca-Sagales, Oriol, 2024. "Human development and inequalities: The importance of social public spending," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 363-377.
    2. Andreas P Kyriacou & Oriol Roca-Sagalés, 2024. "Fiscal Decentralization and Health Care Access and Quality: Evidence from Local Governments around the World," Publius: The Journal of Federalism, CSF Associates Inc., vol. 54(2), pages 313-338.
    3. Andreas P. Kyriacou & Oriol Roca-Sagalés, 2019. "Local Decentralization and the Quality of Public Services in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 755-776, September.
    4. Luis Diaz-Serrano & Enric Meix-Llop, 2019. "Decentralization and the quality of public services: Cross-country evidence from educational data," Environment and Planning C, , vol. 37(7), pages 1296-1316, November.
    5. Díaz Serrano, Lluís & Meix Llop, Enric, 2018. "Decentralization and the Quality of Public Services: Cross-Country Evidence from Educational Data," Working Papers 2072/351581, Universitat Rovira i Virgili, Department of Economics.
    6. Mohamed Dridi, 2014. "Corruption and Education: Empirical Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 4(3), pages 476-493.
    7. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2024. "Health and economic growth: Reconciling the micro and macro evidence," World Development, Elsevier, vol. 178(C).
    8. Anabela Queirós & Aurora A.C. Teixeira, 2014. "Economic growth, human capital and structural change: an empirical analysis," FEP Working Papers 549, Universidade do Porto, Faculdade de Economia do Porto.
    9. Kayode Taiwo, 2024. "The Effect of Decentralisation on Access to Sanitation and Water Services: An Empirical Test using International Data," Hacienda Pública Española / Review of Public Economics, IEF, vol. 249(2), pages 157-180, June.
    10. Gebregziabher, Fiseha & Niño-Zarazúa, Miguel, 2014. "Social spending and aggregate welfare in developing and transition economies," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    11. AfDB AfDB, 2007. "Working Paper 91 - Health Expenditures and Health Outcomes in Africa," Working Paper Series 2224, African Development Bank.
    12. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    13. Eris, Mehmet, 2010. "Population heterogeneity and growth," Economic Modelling, Elsevier, vol. 27(5), pages 1211-1222, September.
    14. Matthias Cinyabuguma & Louis Putterman, 2006. "Sub-Saharan Growth Surprises: Geography, Institutions And History in an all African Data Panel," Working Papers 2006-21, Brown University, Department of Economics.
    15. Jeong, Dong Wook & Lee, Ho Jun & Cho, Sung Kyung, 2017. "Education decentralization, school resources, and student outcomes in Korea," International Journal of Educational Development, Elsevier, vol. 53(C), pages 12-27.
    16. Dincer, Oguzhan & Teoman, Ozgur, 2019. "Does corruption kill? Evidence from half a century infant mortality data," Social Science & Medicine, Elsevier, vol. 232(C), pages 332-339.
    17. Zhang Peng & Ghulam Rasool Madni & Muhammad Awais Anwar & Iftikhar Yasin, 2024. "Imperative of Institutions for Effective Relationship Between Economic Performance and Ethnic Diversity," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2794-2807, March.
    18. AfDB AfDB, 2007. "Working Paper 91 - Health Expenditures and Health Outcomes in Africa," Working Paper Series 2304, African Development Bank.
    19. Usman Khalid & Mohammad Amin, 2023. "The impact of ethnic fractionalisation on labor productivity: Does firm size matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 2213-2249, October.
    20. Kossi Atsutsè Dziédzom Tsomdzo & Yacobou Sanoussi & Kodjo Evlo, 2022. "Investissement en santé et état de santé dans les pays de l'UEMOA: entre contribution publique et privée?," African Development Review, African Development Bank, vol. 34(2), pages 244-254, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:94:y:2023:i:1:p:191-219. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.