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Subnational Health Spending and Soft Budget Constraints in OECD Countries

27 Pages Posted: 29 Jun 2010  

Thomas Stratmann

George Mason University - Buchanan Center Political Economy; CESifo (Center for Economic Studies and Ifo Institute)

Ernesto Crivelli

International Monetary Fund (IMF)

Adam Leive

University of Pennsylvania - The Wharton School

Date Written: June 2010

Abstract

Government spending on health has grown as a percent of GDP over the last 40 years in industrialized countries. Widespread decentralization of healthcare systems has often accompanied this increase in spending. In this paper, we explore the effect of soft budget constraints on subnational health spending in a sample of OECD countries. We find countries where subnational governments rely primarily on central government financing and enjoy large borrowing autonomy have higher healthcare spending than those with more restrictions on subnational government borrowing.

Suggested Citation

Stratmann, Thomas and Crivelli, Ernesto and Leive, Adam, Subnational Health Spending and Soft Budget Constraints in OECD Countries (June 2010). IMF Working Papers, Vol. , pp. 1-26, 2010. Available at SSRN: https://ssrn.com/abstract=1632146

Thomas Stratmann (Contact Author)

George Mason University - Buchanan Center Political Economy ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-2330 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Ernesto Crivelli

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Adam Leive

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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