Fiscal Decentralization and Health Outcomes: Empirical Evidence from Districts of Punjab, Pakistan

Abstract

Aim of the Study: A large number of countries are transferring financial, administrative and political powers to the local governments. In Pakistan, devolution reforms were launched through Local Government Ordinance in 2001. This research investigates that whether higher autonomy of district governments could improve health sector outcomes, in their respective districts or not.

Methodology: The linear fixed effects and random effects regression models are employed for a panel of 34 districts of Punjab province, Pakistan, during 2003-2015.

Findings: The results reveal that fiscal decentralization improves health outcomes in Punjab province of Pakistan. The child and maternal health measures are improved with the evidence of fall in maternal and child mortality rates in Punjab.

Conclusion: The study concluded that the decentralization process during Pervez Musharraf’s regime could not change the structure of the economy as a whole. Therefore, decentralization of health sector in all provinces is suggested to reinforce the benefits of fiscal decentralization.