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Health system efficiency and democracy: A public choice perspective
Martin Roessler1, Jochen Schmitt1
1Zentrum für Evidenzbasierte Gesundheitsversorgung, Universitätsklinikum und Medizinische Fakultät Carl Gustav Carus an der Technischen Universität Dresden, Dresden, Germany.
Plos One
|September 7, 2021
Summary
Democratic political systems enhance health system efficiency by reducing corruption in health expenditures. This study confirms democracy positively impacts population health outcomes, especially in wealthier nations.
Area of Science:
- Health economics
- Political science
- Public health
Background:
- Health system efficiency is crucial due to rising demand and limited resources.
- Previous research overlooked the impact of political regimes on health system efficiency.
- A formal theoretical framework is lacking to explain the link between political institutions and health system efficiency.
Purpose of the Study:
- To theoretically and empirically investigate the relationship between health system efficiency and political institutions.
- To develop a principal-agent model of government behavior regarding health investments under different political regimes.
- To test the hypothesis that democratic regimes lead to more efficient health systems.
Main Methods:
- Utilized a public choice approach and developed a principal-agent model.
- Tested the hypothesis using a dataset of 158 countries from 1995-2015.
- Employed robustness checks, including alternative indicators and endogeneity accounting.
Main Results:
- Theoretical model implies democratic governments reduce health expenditure embezzlement more effectively.
- Empirical results strongly support the hypothesis: democratic countries exhibit higher health system efficiency.
- The positive effect of democracy on health system efficiency is amplified in higher-income countries.
Conclusions:
- Political regime type significantly influences health system efficiency.
- Democracy promotes greater efficiency in health expenditure, leading to better population health outcomes.
- Policy implications suggest considering political context in health development assistance programs.
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