Empirical Economics

, Volume 34, Issue 1, pp 167–184 | Cite as

The impact of decentralization and inter-territorial interactions on Spanish health expenditure

  • Joan Costa-FontEmail author
  • Francesco Moscone
Original Paper


This paper examines the determinants of regional public health expenditure in a decentralised health system. Unlike previous studies we take into account possible policy and political interactions among authorities, as well as unobserved heterogeneity. Our emprirical contribution lies in running a spatial panel specification using a dataset of all Spanish region states on aggregated and disaggregated health expenditures (pharmaceuticals, inpatient and primary care). Results are consistent with some degree of interdependence between neighboring regions in spending decisions. Empirical evidence of long term efficiency effects of health care decentralisation, suggests that a specific spatial-institutional design might improve the health system efficiency as well as regional cohesion. Political and scale effects are consistent with theoretical predictions.


Health expenditure Decentralisation Spatial econometrics Panels 

JEL Classification

I18 I38 C31 C33 


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Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  1. 1.European Institute, LSE Health and Social CareLondon School of EconomicsLondonUK
  2. 2.CAEPS & Departament de Teoria EconòmicaUniversitat de BarcelonaBarcelonaSpain
  3. 3.Department of Economics and Girton CollegeUniversity of LeicesterLeicesterUK
  4. 4.Department of Economics and Girton CollegeUniversity of CambridgeCambridgeUK

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