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Organizational Barriers and Equity: Lessons from Decentralization in LAC. Daniel Maceira, Ph.D. [email protected] Center for the Studies of State and Society Buenos Aires, Argentina. LAC Context During the ’80s and ’90s. Highly Volatile Economies,

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Organizational barriers and equity lessons from decentralization in lac l.jpg

Organizational Barriers and Equity:Lessons from Decentralization in LAC

Daniel Maceira, Ph.D.

[email protected]

Center for the Studies of State and Society

Buenos Aires, Argentina

Lac context during the 80s and 90s l.jpg
LAC Context During the ’80s and ’90s

  • Highly Volatile Economies,

  • Profound Gaps in Income Distribution,

  • Implementation of Macroeconomic Adjustment Policies with Negative Effects on Social Sectors (Education and Health),

  • Social Sectors have been subject to a Series of Reforms. Goals: Achieve Social Objectives s.t. Financial Restrictions (WDR93).

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Political Economy of Health Care Reforms

Political Level

Executive Power

  • Ministry of Health

  • Ministry of Finance


    Local Governments

    Multilateral Organizations

    International Donors

    Social Security Institutions

    Private Health Care Plans

    Health Providers´ Chambers

    Physicians´ Prof. Organizations

    Health Care Workers

    Drugs & Input Producers


    Consumers´ Associations





International Level

Sectoral Level

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Framework: Organizational Barriers

  • Reforms trigger Changes in the Structure of the Sector.

  • Policy Markers should select clear Goals to contrast them against others´Action Plans, identifying potential Partners & designing Mechanisms to align Interests.

  • Decentralization requires:

    • Willingness to Distribute Political & Financial Power.

    • Strong Investments in Management and Social Control at the Local Level.

  • Any reform should forsee a complete Action Plan considering:

    • Spillovers over other sub-sectors (private, social insurance)

    • Cross subsidies to avoid increasing equity gaps.

  • History Matters (federalisms, socialisms, authoritarisms).

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  • Structural Reform + Health Care Strategy (Maternal&Child Insurance)

  • Law of Municipalities (´85)/ Popular Participation Law (´94):

    • Coparticipation Funds: New rules of Distribution, based on Population at Departament Level.

    • Popular Election of Municipal Authorities.

    • Decentralization of Resources (Broken production function).

    • Social Control (Popular M&E Commitees).

  • Actors:

    • “Neoliberal” reforms (Sanchez de Lozada)

    • New economic and political Stakeholders,

      • Municipalities vs. Departments (Santa Cruz – Tarija),

      • Declining Union´s Political Power (post 1985)

      • Strong influence of Intl. Donors and Multilateral Organizations.

  • Results:

    • HC Coverage Increased,

    • Strong non-planned Subsidies,

    • Empowerment of Local Leaders,

    • Weak effects on equity gap in resource allocation.

Slide8 l.jpg







%Co-participation, cumulated


%Own Resources, cumulated

%Foreign Aid, cumulated











Distribution of Resources, by quintile of UBN

and by Source

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Decentralization in Bolivia: constant) and IMR 2001Some Conclusions

  • Administrative/Managerial expertise of major political parties are significant “Quality Shifters” in some Public Policy Outcomes.

  • Urbanity proves to be a relevant issue when planning Health Care Strategies.

  • Financial Resources, as proxy of Decentralization Commitment have a significant, positive and similar effect on Social Outcomes.

  • Local Managerial Capacity has significant and similar effect on Health and Education Outcomes.

  • Community-type variables do not show influence on Social Sectors´Results.

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Argentina constant) and IMR 2001

  • Federalism + Decentralization (late ´80s).

  • Provintial Authorities kept ownership & control of Health Care Resources (human, fiscal, & infrastructure), defining own Public Health Strategies.

  • COFESA: Federal Health Council – Deliverative Body with no enforcement power.

  • 60% of Population covered by Transversal Social Health Insurance Plans.

    • Main Social Security Institution: PAMI (Public insurance for edlery),

    • Unions and Provintial Public Bureaucracies control circa 50% of formal health coverage, divided into 300 social funds:

      • Fragmentation of resources – weak risk pooling mechanisms.

      • Limited solidarity among funds.

      • Provision of care is mainly contracted to Private Providers (no VI financing-provision of care).

  • Therefore:

    • Limited capacity of National Ministry of Health to align interests,

    • Results:

      • Increasing financial gaps in HC among provinces,

      • Inefficiency in Resource Allocation,

      • Crisis 2002: Alignment of National and Provintial Goals helped to support partial reforms (Remediar, Law of Generics) .

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Out-of-pocket in Health Care, by Component (in %), constant) and IMR 2001By Household Income Quintiles (Indec-EGH98)

Health Care Expenditures %




Health Care Services +

Private Insurance











Household Income

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Health Care Expenditures, by Source constant) and IMR 2001

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General Policy Implementation Issues constant) and IMR 2001

  • Scarce Empirical Literature on Decentralization in LAC.

  • Lack of M&E Mechanisms affects Documentation of Results.

  • Limited Institutional Capacity at Public Level provokes Organizational Constraints in Policy Implementation.

  • National Governments do not coordinate Health Care Strategies with Governors and Municipal Authorities.

  • Rules/Reforms´Main Actions are defined by Actors with strong bargaining power, implying:

    • Financial and Epidemiological Risk Transfers,

    • Poor Equity Indicators, leading to inefficient allocation of resources,

    • High Transaction (administrative, bargaining) Costs,

    • Poorly Effective Reforms,

    • Lack of Sustainable M&E Tools to improve feedback and Sound Advocacy Agenda.

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Income, Expenditures and HC Needs constant) and IMR 2001