Finance and Provision of Health and Education

Abstract

Health and education expenditures constitute some of the most important public services that governments provide. Their features are also particularly relevant for nations with multiple levels of government. The provision of health care and education services, and sometimes health insurance coverage for individuals, is typically entrusted to subnational governments. At the same time, as we have mentioned in earlier chapters, these services fulfill important national objectives. They contribute to redistributive objectives such as equality of opportunity and social insurance, and they also promote efficiency and growth in the national economy. The result is that, although the provision of health and education services are decentralized, the federal government maintains an interest in how they are delivered and engages in policies to influence that delivery. We devote this chapter to investigating in more detail some the issues that arise because of this shared responsibility. RESPONSIBILITY BY LEVEL OF GOVERNMENT In discussing the assignment of responsibilities for health care and education and the role of each level of government, it is important to distinguish between the provision of services and their financing. Provision of Health and Education Services Both health care and education represent services provided by hospitals, doctors, schools, teachers, and others directly to individuals. By necessity, the provision of these services is decentralized to local agencies or institutions.