Vertical fiscal imbalance and public health in China

Abstract

ABSTRACT Since the outbreak of COVID-19, public health has become a hot topic at home and abroad. This paper provides an empirical analysis aimed at clarifying the role played by vertical fiscal imbalance (VFI) in public health. Utilising China’s provincial panel data from 2002 to 2018, this study finds strong regularities in the effects of VFI. Specifically, VFI is harmful to public health. It also negatively affects public health by inhibiting public health expenditure and aggravating air pollution. In terms of policy implications, governments may improve public health by reasonably controlling VFI between central and local governments.