The impact of decentralisation on the performance of health care systems: a non-linear relationship

Sean Dougherty, Luca Lorenzoni (), Alberto Marino and Fabrice Murtin
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Luca Lorenzoni: Organisation for Economic Co-Operation and Development

The European Journal of Health Economics, 2022, vol. 23, issue 4, No 10, 705-715

Abstract: Abstract This paper examines the role of institutions—notably the degree of administrative decentralisation across levels of government—in health care decision-making and health spending as well as life expectancy. The empirical analysis builds on a new methodology to analyse health sector performance. In particular, the present analysis examines the impact of centralisation versus decentralisation of responsibilities across levels of government, making use of newly collected data on governance and expenditure assignment, as well as non-linear empirical specifications. An interlocking U-shaped relationship is found with respect to expenditure and life expectancy. Under moderate decentralisation, public spending in health care is lower, while life expectancy is higher, compared with more centralised systems; however, in highly decentralised systems, public spending is higher and life expectancy is lower. This finding of a “fish-shaped” relationship for decentralisation and outcomes also helps to understand recent reforms of OECD health systems, which have often reverted towards more moderate degrees of administrative decentralisation.

Keywords: Public economics; Health care; Intergovernmental fiscal relations; Governance (search for similar items in EconPapers)
JEL-codes: H75 I18 O43 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Working Paper: The impact of decentralisation on the performance of health care systems: A non-linear relationship (2019)
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DOI: 10.1007/s10198-021-01390-1

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