Fiscal Decentralization, Chinese Style: Good for Health Outcomes?

Uchimura Hiroko and Jutting Johannes

No 111, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This study analyzes the effect of fiscal decentralization on health outcomes in China using a panel data set with nationwide county-level data. We find that counties in more fiscal decentralized provinces have lower infant mortality rates compared to those counties in which the provincial government retains the main spending authority, if certain conditions are met. Spending responsibilities at the local level need to be matched with county government's own fiscal capacity. For those local governments that have only limited revenues, their ability to spend on local public goods such as health care depends crucially upon intergovernmental transfers. The findings of this study thereby support the common assertion that fiscal decentralization can indeed lead to more efficient production of local public goods, but also highlights the necessary conditions to make this happen.

Keywords: Fiscal decentralization; Health outcomes; China; Fiscal policy; Decentralization; Local government; Public health; 中国; 財政政策; 地方分権; 地方自治; 公衆衛生 (search for similar items in EconPapers)
JEL-codes: H75 I18 (search for similar items in EconPapers)
Date: 2007-07-01
New Economics Papers: this item is included in nep-cna, nep-dev, nep-hea, nep-pbe and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 111. 2007-07-01

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