Fiscal federalism and health impact in developing economies: a perspective of Kenya

Abstract

The study aim was to examine the interaction between fiscal federalism and health service provision in Kenya. It adopted a longitudinaldescriptive research design. Secondarypanel data for the four years across the forty- seven counties in Kenya. This data was obtainedfrom Kenya National Bureau of Statistics and from fiscal department in devolved units. The study applied a fixed-effects model for data analysis.The disease burden in Kenya for communicable diseases was found to be moderate since morbidity rate was found to be 2.7%. Vertical balance inversely relates with morbidity indicating that level of fiscal federalism that has occurred in Kenya so far is yet to sufficiently meet the required threshold. Regarding the effect of County expenditure on health on morbidity, coefficients are negative as expected but statistically insignificant. Findings do not support extant theory in favour of fiscal federalism. Management of health care as a public good is a highly controversial subject. The health care system in Kenya has been decentralised for many decades. Devolution therefore would be expected to concretise the gains made in the decentralisation era and make health more accessible and reduce the disease burden for Kenyans. Since this has not been established in this study, policy makers have to work hard to determine how the inter-governmental fiscal relations and other fiscal gaps established in this study can be smoothened for better impact