Resource Allocation Phenomenon in a Decentralized Environment

Submitted to APACPH Newsletter February 2008, vol.1.
by Asnawi Abdullah

Many countries in the Asia Pacific region have implemented decentralized health services to region or district level. The degree of decentralization might be different from one country to another. However, it seems there are similarities in how budgets are allocated to different programmes and services. In theory, under a decentralized health system, with local government having a range of options in planning, financing and service delivery, resource allocation becomes better in terms of both technical and allocative efficiency. Under decentralization, district level has more discretion to allocate the budget as their own priority without any obligations to follow rigid guidelines from a central government. However, in reality, this is not so. There is a serious imbalance in resource allocation between programmes, budget categories and lined items. Since implementing decentralization, some programmes receive sufficient budgets while others face serious insufficient funds, particularly budgets for good public health related programmes such as environmental health and sanitation, health promotion, nutrition and maternal and child health programmes. Interestingly, this phenomenon is happening in many countries such as the Philippines, Indonesia, India and in other countries in different regions such as Colombia, Uganda, Paraguay and Ghana. Theses countries have all indicated that budget allocation at district levels need serious attention from both policy makers and researchers.

It is interesting to explore in more detail why this phenomenon is epidemic in many decentralized health systems. Do health planners have similar attitudes and behaviors relating to budget allocation? Can current theories such as principle agent theory, rational choice model of bureaucratic behaviour, and decision space theory help us to understand the underlying factors of this phenomenon? It seems a comprehensive study that involves public health schools in the Asia Pacific exploring such issues is needed to establish soon. I believe under APACPH leadership, a similar model of European Health Systems Observatory can be established in the Asia-Pacific region to study and evaluate this phenomenon.

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