The impact of fiscal decentralization on health outcome in Vietnam: a focus on the role of public service delivery and corruption

Abstract

ABSTRACT This study examines the applicability of fiscal decentralization theory, originally developed in Western countries, to Vietnam at the provincial level. The aim is to explore the indirect impact of public service delivery on the relationship between fiscal decentralization and health outcomes, with corruption as a moderator. The study employs the conditional process analysis. The findings reveal that the multi-dimensional nature of fiscal decentralization results in different statistically significant effects on health outcomes. While fiscal autonomy does not guarantee an impact on health outcomes, revenue-fiscal decentralization positively improves health outcomes. These effects are intensified by more significant control over corruption, suggesting that limiting corruption is crucial to ensuring the benefits of fiscal decentralization. Moreover, our study shows that public service delivery does not mediate the effect of fiscal decentralization on health outcomes. Overall, our findings suggest that applying Western theories of fiscal decentralization to the context of Vietnam is challenging. The research recommends reforming the fiscal transfer mechanism and strengthening control over corruption in public services.