DOES FISCAL DISCIPLINE TOWARDS SUBNATIONAL GOVERNMENTS AFFECT CITIZENS' WELL‐BEING? EVIDENCE ON HEALTH

Massimiliano Piacenza and Gilberto Turati ()

Health Economics, 2014, vol. 23, issue 2, 199-224

Abstract: This paper aims to assess the impact on citizens' well‐being of fiscal discipline imposed by the central government on subnational governments. Because healthcare policies involve strategic interactions between different layers of governments in many different countries, we focus on a particular dimension of well‐being, namely citizens' health. We model fiscal discipline by considering government expectations of future deficit bailouts from the central government. We then study how these bailout expectations affect the expenditure for healthcare policies carried out by decentralized governments. To investigate this issue, we separate efficient health spending from inefficiencies by estimating an input requirement frontier. This allows us to assess the effects of bailout expectations on both the structural component of health expenditure and its deviations from the ‘best practice’. The evidence from the 15 Italian ordinary statute regions (observed from 1993 to 2006) points out that bailout expectations do not significantly influence the position of the frontier, thus not affecting citizens' health. However, they do appear to exert a remarkable impact on excess spending. Copyright © 2013 John Wiley & Sons, Ltd.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
https://doi.org/10.1002/hec.2910

Related works:
Working Paper: Does fiscal discipline towards sub-national governments affect citizens’ well-being? evidence on health (2010)
Working Paper: Does Fiscal Discipline towards Sub-national Governments Affect Citizens' Well-being? Evidence on Health (2010)
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:wly:hlthec:v:23:y:2014:i:2:p:199-224

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().