The impacts of fiscal decentralization on health outcomes in Bangladesh

Abstract

Introduction :

In exhibiting solidarity to the universal commitment to secure sustainability in healthcare, governments across the globe have warranted policy reforms to enhance the efficiency of public healthcare service deliveries. Hence, taking the health sector development into cognizance, governments worldwide have gradually embarked on decentralization of fiscal expenditure patterns, particularly, following the anticipation of ensuring better efficacies of public healthcare investments through the empowerment of local governments (Cavalieri and Ferrante, 2016). It is hypothesized that sub-national financing of public funds, allotted for the health sector, can catalyze allocative efficiencies which, in turn, is thought to entail significant impacts on the overall health indicators within the economy (Martinez‐Vazquez, Lago- Peñas and Sacchi, 2017).

However, though a plethora of studies documented in the existing public finance discourse have voiced in favor of positive health outcomes emerging from the fiscal decentralization decisions, it is yet to reach a consensus. For instance, in studies by Jin and Sun (2011) and Samadi et al. (2013), the authors found fiscal decentralization in China and Iran exerting adverse impacts on infant mortality and under-five mortality rate, respectively. Moreover, linking decentralization to poor public health care delivery, Ablo and Reinikka (1998) reported statistical evidence of decentralization decisions dampening public health investments in the local districts of Uganda. Thus, following the ambiguity in the nature of the nexus between fiscal decentralization and the health outcomes, it is pertinent to evaluate the dynamics of this correlation for crucial policy implications.