Municipal expenditures using own-source revenues and resilience of territorial inequalities in health

Abstract

The objective of this study is to assess the importance of municipal expenses executed with own-source revenues for the maintenance of the territorial inequalities between resources allocated by Brazilian municipalities in the health sector, in spite of the redistributive effects attributed to the vertical transfers of the Brazilian National Health System. The formation of municipal own-source revenues is strongly impacted by regional economic inequalities, corresponding to almost 60% of the resources allocated by municipalities to health in recent years. Based on the Tree Edge Removal method, the total expenditures and those executed with own-source revenues by the municipalities were spatially distributed, thereby enabling identification of clusters from 2005 to 2015 in both cases. Central and dispersion measures were calculated for the two types of expenditure in this interval for the clusters. In the end, we found municipal expenditures with own-source revenues show levels of inequality which are significantly higher than those of the total municipal health expenditure, and even more significant is that these inequalities increase in time with higher intensity in the case of the former. Since municipalities are the main implementers of public health policy, results suggest higher levels of territorial equity will necessarily require adjustments in fiscal federalism in this sector.