Rudi Rocha, FGV EAESP

Paper: Does Increasing Public Spending in Health Improve Health? Lessons from Constitutional Reform in Brazil

Coautores: Damian Clarke and Michel Szklo

Abstract: This paper assesses the causal effects of government health spending on health outcomes by leveraging the variation in health spending prompted by Brazil’s 29th Constitutional Amendment of 2000. We also document the links in the chain connecting spending reform to health outcomes. We show that (a) a constitutional amendment mandating minimum health spending effectively changed spending patterns for municipalities which were previously below spending floors; (b) increases in health spending translated into greater primary care coverage, higher supply of municipal hospitals and less-skilled professionals, and; (c) lead to moderate reductions in infant mortality within 24 hours and due to perinatal conditions, as well as long term reductions in total infant mortality and infant mortality amenable to primary care. Our results contribute to the literature on the impacts of health spending by providing one of the first well-identified causal parameters of the relationship between public spending in health and health outcomes.