Subnational Unevenness in Healthcare Provision: the Role of Fiscal Dependence and Local Governance in Brazilian Municipalities.

How do fiscal dependency and local governance shape the delivery of public policies at the subnational level? Public policies are unevenly distributed within countries, and a citizen’s access to these services often depends on where they live. Local governments vary significantly in their ability to generate revenue, which leads to disparities in public policy implementation across the national territory. In this article, I argue that a skilled bureaucracy plays a critical role in how fiscal management influences public policy, as it is able to make better use of local resources and the intergovernmental transfers received by municipalities, even in a context of few resources. My main hypothesis is that better management mitigates the negative effects of fiscal dependence on intergovernmental transfers on the indices of inputs, processes and results. To test this claim, I analyse a panel of 5,574 Brazilian municipalities over six years (2014) with information on health expenditure, BCG vaccination coverage, infant mortality rate, municipal public revenue and bureaucracy, and political and socio-economic information using beta and spatial error regression models. Brazil’s unique context of being a single country with over 5,000 sub-national entities offers an ideal setting to explore the heterogeneous effects of fiscal dependency within a consistent institutional framework, helping to draft conclusions to other federal and decentralised countries. With this paper, I seek to contribute to a better understanding of the effects of local bureaucracy on public policies, specifically in contexts of strong fiscal disparity.