Sub-National State Capacity and Variation in Municipal Health Financing: Evidence from Brazilian Municipalities

Event details

Abstract

There is a growing body of literature on the role of institutional capacity in delivering public services. A recent study examined how dimensions of state capacity relate to health expenditure and out-of-pocket spending cross-nationally (Mazumdar et al. 2026), but far less evidence addresses capacity at the sub-national level. This gap matters in Brazil, where municipalities are responsible for delivering public health care under the Unified Health System (SUS). This study examines how sub-national state capacity relates to public health financing across 5,568 Brazilian municipalities from 2005 to 2023, using administrative panel data. State capacity is measured along four indicators spanning three dimensions — coercive, fiscal, administrative size, and administrative stability — against two outcomes: log real per-capita public health expenditure and deviation above the EC-29 15% health-spending floor. 

The analysis applies two-way fixed effects, two-level multilevel models, and a dynamic panel estimator. Fiscal and administrative capacity are consistently associated with both outcomes, while coercive capacity demonstrates little to zero effect. Notably, the  associations vary with municipal size: fiscal capacity peaks in mid-sized municipalities and tapers in the largest, while administrative capacity strengthens progressively with population. 

This seminar is online only and will not be recorded.

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