Do political factors influence public health expenditures? Evidence pre- and post-great recession.

Abstract

This paper analyses whether government ideology and other political- and electoral-related factors influence country-level public healthcare expenditures, focussing on the impact of the Great Recession on that relationship. We test this hypothesis for the OECD countries in 1970-2016. Our results reveal the presence of a partisan effect, left-wing governments being more likely to raise public expenditures in the health sector. We also find that coalitions increase these expenditures, whilst minority governments and those with a high presence in the lower house decrease them. Meanwhile, the opportunistic behaviour of incumbents related to the timing of elections is not supported by our results. The percentage of public expenditures over total health expenditures is also examined, obtaining similar results regarding the partisan effect. However, the onset of the Great Recession has altered these relationships, neutralizing the impact of political factors.