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Marginal benefit incidence of public health spending: Evidence from Indonesian sub-national data

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  • Kruse, Ioana
  • Pradhan, Menno
  • Sparrow, Robert

Abstract

We examine the marginal effects of decentralized public health spending by incorporating estimates of behavioural responses to changes in health spending in benefit incidence analysis. The analysis is based on a panel dataset of 207 Indonesian districts over the period from 2001 to 2004. We show that district public health spending is largely driven by central government transfers, with an elasticity of around 0.9. We find a positive effect of public health spending on utilization of outpatient care in the public sector for the poorest two quartiles. We find no evidence that public expenditures crowd out utilization of private services or household health spending. Our analysis suggests that increased public health spending improves targeting to the poor, as behavioural changes in public health care utilization are pro-poor. Nonetheless, most of the benefits of the additional spending accrued to existing users of services, as initial utilization shares outweigh the behavioural responses.

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  • Kruse, Ioana & Pradhan, Menno & Sparrow, Robert, 2012. "Marginal benefit incidence of public health spending: Evidence from Indonesian sub-national data," Journal of Health Economics, Elsevier, vol. 31(1), pages 147-157.
    • Handle: RePEc:eee:jhecon:v:31:y:2012:i:1:p:147-157
    DOI: 10.1016/j.jhealeco.2011.09.003
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    Cited by:

    1. Kis-Katos, Krisztina & Sjahrir, Bambang Suharnoko, 2017. "The impact of fiscal and political decentralization on local public investment in Indonesia," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 344-365.
    2. Andrew J. Mirelman & Miqdad Asaria & Bryony Dawkins & Susan Griffin & Richard Cookson & Peter Berman, 2020. "Fairer Decisions, Better Health for All: Health Equity and Cost-Effectiveness Analysis," World Scientific Book Chapters, in: Paul Revill & Marc Suhrcke & Rodrigo Moreno-Serra & Mark Sculpher (ed.), Global Health Economics Shaping Health Policy in Low- and Middle-Income Countries, chapter 4, pages 99-132, World Scientific Publishing Co. Pte. Ltd..
    3. Asep Suryahadi & Robert Sparrow & Wenefrida Dwi Widyanti, "undated". "Asuransi Kesehatan Sosial untuk Masyarakat Miskin: Penargetan dan Dampak Program Askeskin di Indonesia," Working Papers 3450, Publications Department.
    4. Candra Fajri Ananda, 2017. "Does Government Quality Spending can reduce Poverty? A Case in East Java Province," GATR Journals gjbssr458, Global Academy of Training and Research (GATR) Enterprise.
    5. James Love-Koh & Susan Griffin & Edward Kataika & Paul Revill & Sibusiso Sibandze & Simon Walker, 2019. "Incorporating concerns for equity into health resource allocation. A guide for practitioners," Working Papers 160cherp, Centre for Health Economics, University of York.
    6. Sparrow, Robert & Suryahadi, Asep & Widyanti, Wenefrida, 2013. "Social health insurance for the poor: Targeting and impact of Indonesia's Askeskin programme," Social Science & Medicine, Elsevier, vol. 96(C), pages 264-271.
    7. Karim, Azreen & Noy, Ilan, 2015. "The (mis) allocation of public spending in a low income country: Evidence from disaster risk reduction spending in Bangladesh," Working Paper Series 4194, Victoria University of Wellington, School of Economics and Finance.
    8. Robert Sparrow & Sri Budiyati & Athia Yumna & Nila Warda & Asep Suryahadi & Arjun S. Bedi, . "Sub-National Health Care Financing Reforms in Indonesia," Journal Article, Publications Department.
    9. Finnegan, Amy, 2020. "Effects of a sister's death in childbirth on reproductive behaviors: Difference-in-difference analyses using sisterhood mortality data from Indonesia," Social Science & Medicine, Elsevier, vol. 250(C).
    10. Karim, Azreen & Noy, Ilan, 2015. "The (mis) allocation of public spending in a low income country: Evidence from disaster risk reduction spending in Bangladesh," Working Paper Series 19263, Victoria University of Wellington, School of Economics and Finance.
    11. Sujarwoto, Sujarwoto & Tampubolon, Gindo, 2016. "Spatial inequality and the Internet divide in Indonesia 2010–2012," Telecommunications Policy, Elsevier, vol. 40(7), pages 602-616.
    12. Karim, Azreen & Noy, Ilan, 2020. "Risk, poverty or politics? The determinants of subnational public spending allocation for adaptive disaster risk reduction in Bangladesh," World Development, Elsevier, vol. 129(C).

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    More about this item

    Keywords

    Decentralization; Public spending; Health care utilization; Benefit incidence; Indonesia;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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