Abstract

Decentralization is often a major part of health reform policies. However, there have been few attempts to comparatively study the degree of decentralization and the effects of decentralization on equity of allocations to health, so we do not know how best to implement this reform. This article uses an innovative comparative analysis of the 'decision space' that was allowed to local municipalities in the health reforms of Bolivia and Chile, two countries that have had several years of experience in implementing decentralization. The studies found that relatively little decision space was allowed to local authorities over key functions of health care systems. The studies also found that central authorities often reduce the decision space in order to direct more resources to health or to restrict local choice over human resources issues. The studies found that more equitable allocations of health funding were achieved through a common equalization fund for the municipalities in Chile and by forcing the assignment to health of a specific percentage of the central government transfers to municipalities in Bolivia.