Drivers of Territorial Inequalities in Education and Health Care in Multilevel Systems

Existing research on inequality focuses predominantly on socio-economic inequalities between individuals, or ‘interpersonal inequalities’ (Milanovic, 2016; Piketty, 2014). But inequality also has a territorial dimension (Beramendi, 2012; della Porta et al., 2021; González, 2019). Like interpersonal inequalities, territorial inequalities can have disruptive effects on democratic societies. They undermine the principle of social citizenship. Citizens generally dislike such ‘postcode lotteries’ in the access to public services (Henderson et al., 2014). Thus, territorial inequalities can fuel regional resentments. In many countries, several if not most public services are provided at the subnational level — whether these countries are federal, unitary, and/or regionalized systems. Policy delivery by regional governments may generate regional differences in wealth, access to public services, and policy outcomes due to differences in fiscal, economic, and administrative capacity and collective preferences at the subnational level (Beramendi, 2012; Rodríguez-Pose & Ezcurra, 2010). For instance, prosperous regions can provide more generous public services than poorer ones. Consequently, decentralization can be expected to be a key driver of territorial inequalities in public service delivery and/or policy outcomes. However, whether the decentralization of public services really leads to territorial inequalities in terms of policy has not been examined systematically. Most existing literature focuses on the effect fiscal decentralization has on territorial inequalities in economic terms, defining such inequalities as regional differences in GDP or household income (Banting & McEwen, 2018; Beramendi, 2012; Beramendi & Rogers, 2020; González, 2019; Sorens, 2014). The few studies examining policy effects typically rely on fiscal indicators such as subnational spending (2013). This paper moves beyond fiscal and economic indicators. To explore the relationship between decentralization and territorial inequalities, it investigates whether policy decentralization leads to regional differences in health and education outcomes in more than 20 OECD members using data from the OECD Regional Statistics Database. The contribution of the paper is thus two-fold: Firstly, it measures territorial inequalities in two major areas of public policy. Second, it explores determinants of such inequalities. Preliminary findings suggest that decentralization is not the main driver of territorial inequalities in policy outcomes. Thus, territorial inequalities may be associated with other factors such as the size of the country, geographical differences, the number of subnational units, regional economic disparities (Rodríguez-Pose & Ezcurra, 2010, p. 620), socio-linguistic heterogeneity, ideology, or subnational competition. Moreover, fiscal equalization schemes, policy coordination, policy learning and diffusion, federal grants, regional integration, or constitutional commitments to solidarity may mitigate the effect the decentralization of public service provision could have on territorial inequalities.