Bailing out expectations and public health expenditure

Risultato della ricerca: Contributo in rivistaArticolo in rivista

73 Citazioni (Scopus)

Abstract

We use a “natural experiment”, the fiscal adjustment of Italy in the 1990s to meet the Maastricht criteria, to test a simple model of soft budget constraint that closely resembles the intergovernmental relationships in the Italian public health care sector. We show that the link between the ex-ante financing by the Central government and the health expenditure by regions was stronger when regional expectations of future bailing outs were presumably lower. Confirming previous research, we also prove that more fiscally autonomous regions were more financially responsible and that a political “alignment” effect was present, with “friendly” regional governments controlling more expenditure than unfriendly ones. Our results suggest that, at least in Italy, bailing out expectations by regions may be the missing variable emphasised by [Culyer A.J., 1988. Health care expenditures in Canada: Myth and reality. Canadian Tax Papers, 82] for empirical models explaining health expenditure. Our results also raise someworries about the outcome of the current decentralization process in Europe.
Lingua originaleEnglish
pagine (da-a)305-321
Numero di pagine17
RivistaJournal of Health Economics
Volume28
DOI
Stato di pubblicazionePubblicato - 2009

Keywords

  • Health Care Expenditure
  • Intergovernmental relationships
  • Soft budget constraint

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