Essays on political decentralization, government health spending, financial autonomy, accountability, and health service delivery outcomes

Abstract

Over the last decade, the Sustainable Development Goals (SDGs) have highlighted significant challenges in health and education that many nations aim to overcome by 2030. The SDG target for universal health coverage (UHC) is particularly relevant for low and middle-income countries struggling with poor health and education outcomes. To address these issues, some argue that political decentralization (PD), increased domestic government health spending (DGHS), financial autonomy, and accountability in health service delivery are essential. They believe that politically decentralized systems have better access to information about people's needs and can respond more effectively to healthcare demands. Conversely, others argue that these factors do not guarantee improved health outcomes, citing inefficiencies due to coordination bottlenecks, weak state capacity, and weak accountability systems in decentralized systems.

There is a gap in the literature however, on quantifying the costs and benefits of PD on health outcomes, with most explanations being narrative. Additionally, despite the implied benefits of complementarities among DGHS, financial autonomy, and accountability, there is a lack of empirical testing on their effects on health outcomes. Most studies focus on individual analyses of these variables in single countries. This study builds on existing literature by quantitatively testing the costs and benefits of PD on health outcomes during shocks like Influenza A virus subtype H1N1 (H1N1) and Coronavirus Disease (COVID). It further investigates the existence of complementarities among DGHS, financial autonomy, and accountability on health outcomes, including infant mortality, life expectancy, and maternal mortality.

We first investigate how PD impacts H1N1 and COVID fatalities through its information and cost inefficiency channels. Both shocks required increased DGHS to control fatalities. Using panel data analysis, we found that politically decentralized systems reduced fatalities through the information channel, despite higher spending implying cost inefficiency. Overall, the information channel's effect outweighed the cost inefficiency, suggesting a net positive impact of political decentralization on controlling fatalities. These findings have significant policy implications for countries considering decentralization to improve health service delivery outcomes and are robust to various specifications and assumptions.

We further investigate whether increased DGHS improves health outcomes – infant mortality, life expectancy, and maternal mortality – without financial autonomy and strong accountability. While health policymakers argue that the SDGs' goal of UHC by 2030 presents an opportunity to increase health sector spending, some question whether doing so will improve health outcomes without financial autonomy and accountability of providers. The results show that increased DGHS alone does not improve these health outcomes. However, when combined with financial autonomy, DGHS positively impacts these outcomes. The interaction between DGHS and accountability shows no significant effects on infant mortality, life expectancy, and maternal mortality. The findings are robust across various specifications and assumptions.

Date of Award	7 May 2025
Original language	English
Awarding Institution	University of Bath
Supervisor	Robertas Zubrickas (Supervisor) & Eleonora Fichera (Supervisor)