Fiscal Decentralization, Local Competitions and Sustainability of Medical Insurance Funds: Evidence from China

Wenqiang Qian, Xiangyu Cheng, Guoying Lu, Lijun Zhu and Fei Li
Additional contact information
Wenqiang Qian: The Co-Innovation Center for Social Governance of Urban and Rural Communities in Hubei Province, Zhongnan University of Economics and Law, Wuhan 430073, China
Xiangyu Cheng: The Co-Innovation Center for Social Governance of Urban and Rural Communities in Hubei Province, Zhongnan University of Economics and Law, Wuhan 430073, China
Guoying Lu: The Co-Innovation Center for Social Governance of Urban and Rural Communities in Hubei Province, Zhongnan University of Economics and Law, Wuhan 430073, China
Lijun Zhu: The Co-Innovation Center for Social Governance of Urban and Rural Communities in Hubei Province, Zhongnan University of Economics and Law, Wuhan 430073, China
Fei Li: Research Center for Environment and Health, Zhongnan University of Economics and Law, Wuhan 430073, China

Sustainability, 2019, vol. 11, issue 8, 1-21

Abstract: Local governments are responsible for the management of social medical insurance for urban and rural residents in China. Under the background of fiscal decentralization between the central government and local governments, the strengthening of supervision on medical insurance funds by local governments leads to a reduction in the expenditure of the medical insurance fund, which contributes to its sustainability. By employing the provincial level panel data during 2004–2014, we used a fixed effect model and a spatial autoregression model to investigate whether fiscal decentralization has had a negative influence on the expenditure of China’s new rural cooperative medical system (NCMS) fund. We found that fiscal decentralization has had a significant influence over its per capita expenditure. Our results also indicate that higher fiscal decentralization leads to higher financial aid in the NCMS provided by local governments. Additionally, the expenditure of the NCMS and the local financial aid are influenced by nearby governments. Our results suggest that appropriate fiscal decentralization, which helps to maintain the sustainability of social medical insurance funds, should be encouraged.

Keywords: fiscal decentralization; local competition; the medical insurance fund; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/8/2437/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/8/2437/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:8:p:2437-:d:225631

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().