Assessing the Impact of Fiscal Decentralization on Health Sector: A Cross Country Analysis
Author: Afraz Ahmad

While the devolution of fiscal liabilities is the focus agenda of the governments now a days, so in this regard many studies has been done to elaborate the impact of fiscal decentralization on public services and economic growth. In this study we focus on examine the impact of fiscal decentralization on health outcomes, using panel data of 75 economies, for the period of 1972 to 2018. We used the Baltagi and Wu (1999) test to estimate the regressions, as it provides the batter estimation results for missing values and unbalanced data. We employed the health expenditures and Infant Mortality rate to judge the long run and short run impact of fiscal decentralization on health. To capture the effect of fiscal decentralization we employed the four proxies i) Subnational Tax Revenue, ii) Subnational Government Total Revenue, iii) Subnational Government expenditure decentralization and iv) Vertical Fiscal Imbalance. The findings of the study suggest that when lower level of governments enjoys the liberty of decision making regarding revenue and expenditure, they influence the health sector positively. As our results shows that proper fiscal decentralization process increase the proportion of health spending in GDP and decrease the infant mortality rate. While the dependency on federal transfer lead to have a negative impact on health. The disaggregated results of different level of economies (i.e. High, Medium, and Low Income Economies) has been produced, which will help in comparing the impact of fiscal decentralization on different level of economies. Supervisor:- Dr. Iftikhar Ahmed

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Supervisor: Iftikhar Ahmad

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