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Health Spending and Decentralization in Indonesia

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

Abstract

Using a panel dataset of 320 Indonesian districts we examine the impact of district budgets on public health spending, utilization patters in the public and private sector, and private health spending in the four years after decentralization. We exploit the panel structure of the data and the fact that district budgets are largely driven by central government transfers to determine causal patterns. We find that the elasticity of public health spending with respect to district budgets is around 0.9 with a higher elasticity for development spending than for routine spending. District splits reduce public health spending. We find a positive effect of public district health spending on public sector utilization, with the strongest effects in the poorest two quintiles. We find no significant effects on private sector utilization and out of pocket health expenditures.

Suggested Citation

  • Kruse, Ioana & Pradhan, Menno & Sparrow, Robert, 2009. "Health Spending and Decentralization in Indonesia," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 33, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec09:33
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    2. Andrew Hodge & Sonja Firth & Tiara Marthias & Eliana Jimenez-Soto, 2014. "Location Matters: Trends in Inequalities in Child Mortality in Indonesia. Evidence from Repeated Cross-Sectional Surveys," PLOS ONE, Public Library of Science, vol. 9(7), pages 1-10, July.
    3. Karima Saleh, 2012. "World Bank study : A Health Sector in Transition to Universal Coverage in Ghana," World Bank Publications - Reports 2728, The World Bank Group.
    4. Bernard F. Couttolenc, 2012. "Decentralization and Governance in the Ghana Health Sector," World Bank Publications - Books, The World Bank Group, number 9376.
    5. Durdana Qaiser Gillani & Syed Ahmad Saad Gillani & Muhammad Zahid Naeem & Cristi Spulbar & Elizabeth Coker-Farrell & Abdullah Ejaz & Ramona Birau, 2021. "The Nexus between Sustainable Economic Development and Government Health Expenditure in Asian Countries Based on Ecological Footprint Consumption," Sustainability, MDPI, vol. 13(12), pages 1-15, June.

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