Fiscal Decentralization and Health Service Delivery: An Assessment

Janet Cuenca

No DP 2020-04, Discussion Papers from Philippine Institute for Development Studies

Abstract: The study proposes an analytical framework that examines the effects of fiscal decentralization on health service delivery using difference-in-differences (DID) method. It draws up the standard measure of the extent/degree of fiscal decentralization affecting the health sector. The findings of the DID analysis suggest that greater health decentralization has negative impact on access to hospital inpatient services and access to sanitation (toilet). It contradicts the hypothesis of the study that greater health decentralization will result in better health services. Nevertheless, it is consistent with the narrative in the literature that points out the lower province-level spending on hospitals due to mismatch between the cost of devolved hospitals and the internal revenue allotment (IRA), i.e., block grant transferred to the LGUs. Such negative effect has remained over the years because most LGUs do not have adequate health budget to maintain and upgrade devolved health facilities. Comments to this paper are welcome within 60 days from date of posting. Email publications@mail.pids.gov.ph.

Keywords: health devolution; devolution; fiscal decentralization; difference-in-differences (DID) analysis (search for similar items in EconPapers)
Date: 2020
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