Intra‐provincial fiscal decentralization, relative wealth, and healthcare efficiency: Empirical evidence from China

Abstract

Decentralizing fiscal power to locally elected governments is often regarded as beneficial for public service efficiency. However, questions remain about whether decentralizing fiscal responsibilities work well in countries lacking political decentralization. In China, fiscal decentralization has significantly strengthened the role of local governments in the provision of healthcare services, but evidence of its efficiency effects is scarce. To cast light on this issue, this study investigates the relationship between intra‐provincial fiscal decentralization and the productive efficiency of healthcare services in China. Analysis of panel data for 2006–2017 suggests that expenditure and revenue decentralization from provincial to sub‐provincial governments significantly improves healthcare efficiency. Further analysis suggests that the positive impact of healthcare expenditure decentralization on healthcare efficiency may be stronger in wealthier provinces. These findings have important theoretical and practical implications.

Efficiency measurement and spatial spillover effect of provincial health systems in China: Based on the two-stage network DEA model

“…From the perspective of institutional factors, China's fiscal decentralization system enables local governments to have greater power to allocate resources, which further reflects the ability of local governments in providing public services. Most scholars emphasized that the fiscal decentralization system affects the decision-making of local governments in the provision of health services, which in turn affects the health care efficiency ( 73 , 74 ). Therefore, we incorporate fiscal decentralization ( fiscal ) into the analysis model, and use the proportion of local government per capita fiscal expenditure to central government per capita fiscal expenditure to measure it.…”

Commercializing nonprofit organizations? Evidence from the Chinese nonprofit sector

“…We draw each prefectural city/municipality's number of registered nonprofits (associations, private nonenterprise organizations, and foundations) from the Chinese Social Organization Database ( Shehui Zuzhi Xinxi Chaxun ) (http://www.chinanpo.gov.cn/search/orgindex.html, accessed on March 2018) and population size from its provincial/municipal Statistical Yearbook. Similar to previous studies (e.g., Bielefeld et al, 1997; Kim & Kim, 2015; Liu, 2017; Sun & Andrews, 2022), we used the per capita gross domestic product (GDP) of the prefectural city/municipality where a nonprofit operates to measure resource munificence. The data for this variable came from each prefectural city's provincial/municipal Statistical Yearbook and were then converted to logarithm form.…”

Exploring the Interrelationships between Public Health, Fiscal Decentralization, and Local Government Debt in China

“…Conversely, Wang, et al [43] argue that escalated fiscal decentralization magnifies regional disparities, especially in preventative health services. Sun and Andrews [9] provides a unique perspective, suggesting that fiscal decentralization improves public health efficiency and service expenditure. Although our investigation primarily concentrates on the effect of fiscal decentralization on provincial fiscal expenditure and income, the insights derived from these previous studies provide an indispensable context.…”

“…Economically disadvantaged regions frequently confront underinvestment in their environment and public health sectors [7,8]. On the other hand, regions demonstrating a higher degree of fiscal decentralization, with autonomy in fund allocation, can dedicate more resources to healthcare services [9]. This scenario often culminates in better-funded, resilient healthcare systems.…”