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Evidence from China on fiscal decentralization within provinces, relative wealth, and healthcare efficiency

The effectiveness of public services is frequently considered as a benefit of decentralizing budgetary power to locally elected governments. However, there are also concerns about whether decentralizing economic duties in countries with a lack of political decentralization is a good idea. The involvement of local governments in the provision of healthcare services in China has been greatly strengthened through fiscal decentralization, although there is no evidence of its efficiency benefits. The relationship between intra-provincial fiscal decentralization and the productive efficiency of healthcare services in China is investigated in this study to shed light on this subject. Decentralization of spending and revenue from provincial to sub-provincial governments, according to panel data from 2006 to 2017, enhances healthcare efficiency dramatically. According to further research, decentralization of healthcare spending may have a greater influence on healthcare efficiency in wealthy areas.