Government response to increased demand for public services: the cyclicality of government health expenditures in the OECD

Andrew Abbott, Philip Jones

Research output: Contribution to journalArticlepeer-review

Abstract

The more that health care expenditures are financed by general taxation, the greater the discretion governments are likely to exercise when timing increases in health care expenditures. Vote-maximising governments time increases in health care expenditures to occur in economic upturns, when voters are not as aware of the required increase in taxation. In recessions, they have an incentive to sustain expenditures on health care by diverting expenditures from other public expenditure programmes that voters perceive as low priority. In this way, government pursuit of a political agenda is likely to exert a systematic influence on the cyclicality of government expenditure. Predictions are tested with reference to the cyclicality of government health expenditures, for a sample of OECD countries from 2000 to 2012.
Original languageEnglish
Article number101988
JournalEuropean Journal of Political Economy
Volume68
Early online date5 Dec 2020
DOIs
Publication statusPublished - 30 Jun 2021

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