Inter-provincial inequality of public health services in China: the perspective of local officials\u2019 behavior

Tianxiang Chen,Yuxuan Rao,Ying Wang,Xiaoyi Luo,Lei Hua

doi:10.1186/s12939-018-0827-8

Abstract

BackgroundAfter economic reform, China experienced rising public health services inequality between the eastern developed and mid-west undeveloped provinces. The fiscal transfer payment system which aims to shape the disparities was considered inefficient. However, there are only a few studies that address the political reason when analyzing the inter-provincial public health services inequality. And the previous studies did not consider a possible non-linear relationship between the fiscal transfer payments and the inter-provincial public health services equalization.MethodsThis paper argues that the local officials’ fanatical pursuit of local economic growth which driven by the Political Promotion Tournament and the polarized fiscal self-sufficiency (fiscal capacities) of local governments are responsible for the inter-provincial inequality of public health services and the inefficiency of fiscal transfer payments. By constructing panel threshold regression models with fiscal self-sufficiency of local governments as threshold variable, this study tries to empirically investigate the optimal level of the local governments’ self-sufficiency at which the fiscal transfer payments can effectively promote equalization.ResultsThreshold effects exist between fiscal transfer payments and inter-provincial public health services equalization. The effects on inter-provincial public health services equalization show trends that first increase and then decrease as the fiscal self-sufficiency of local governments increases. And there exist a range of fiscal self-sufficiency between 29.236 and 43.765% or between 28.575 and 45.746% for local governments where the fiscal transfer payments can effectively achieve equalization. Currently, the vast majority of provinces in China remain in the ineffective regime where the fiscal transfer payments are inefficient in shaping inequality.ConclusionsThis paper explains the reason of inequality in public health services and the inefficiency of fiscal transfer payment system from Chinese local officials’ behavior aspect, and try to find out an effective solution by focusing on the local government’s fiscal capacity. The effective way to narrow the inequality is to establish a flexible tax-sharing system to adjust local governments’ fiscal capacities and give local governments with low fiscal self-sufficiency more fiscal resources. The new policy measures recently launched by Chinese central government coincide with our recommendations.

Highlights

After economic reform, China experienced rising public health services inequality between the eastern developed and mid-west undeveloped provinces
The number of medical clinic visit per person in 2014 in developed provinces such as Beijing and Shanghai was 9.93 and 10.33, respectively, while that number in undeveloped provinces such as Guizhou and Qinghai was only 3.71 and 3.87, respectively [8]. Those information shows that residents in developed provinces of China have better public health services than those in undeveloped provinces, which tells that inequality of public health services among provinces has already been a serious issue in China
The result is consistent with our Hypothesis 3. Both Model 1 and Model 2 show that there exist threshold effects between fiscal transfer payments and inter-provincial public health services equalization, the impact of fiscal transfer payments on inter-provincial public health services equalization first increases and decreases with the advancing of the local governments’ fiscal self-sufficiency level, and there exist a range of fiscal self-sufficiency for local governments at which the fiscal transfer payments can effectively achieve inter-provincial public health services equalization

Summary

Introduction

China experienced rising public health services inequality between the eastern developed and mid-west undeveloped provinces. The previous studies did not consider a possible non-linear relationship between the fiscal transfer payments and the inter-provincial public health services equalization. The number of medical clinic visit per person in 2014 in developed provinces such as Beijing and Shanghai was 9.93 and 10.33, respectively, while that number in undeveloped provinces such as Guizhou and Qinghai was only 3.71 and 3.87, respectively [8] Those information shows that residents in developed provinces of China have better public health services than those in undeveloped provinces, which tells that inequality of public health services among provinces has already been a serious issue in China. Once this inequality has spread, complains and sense of unfairness will increased gradually and eventually devastate the basis that the country relies to develop

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Conclusion