Reports
Discussion Papers
No.111 Fiscal Decentralization, Chinese Style: Good for Health Outcomes?
by UCHIMURA Hiroko and Johannes Jütting
July 2007
ABSTRACT
This
study
analyzes
the
effect
of
fiscal
decentralization
on
health
outcomes
in
China
using
a
panel
data
set
with
nationwide
county-level
data.
We
find
that
counties
in
more
fiscal
decentralized
provinces
have
lower
infant
mortality
rates
compared
to
those
counties
in
which
the
provincial
government
retains
the
main
spending
authority,
if
certain
conditions
are
met.
Spending
responsibilities
at
the
local
level
need
to
be
matched
with
county
government’s
own
fiscal
capacity.
For
those
local
governments
that
have
only
limited
revenues,
their
ability
to
spend
on
local
public
goods
such
as
health
care
depends
crucially
upon
intergovernmental
transfers.
The
findings
of
this
study
thereby
support
the
common
assertion
that
fiscal
decentralization
can
indeed
lead
to
more
efficient
production
of
local
public
goods,
but
also
highlights
the
necessary
conditions
to
make
this
happen.
Keywords:
fiscal
decentralization,
health
outcomes,
China
Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.