Public budget, region and funding in health care: oil revenues and inequalities between municipalities

Abstract

The effects of the allocation of revenues from oil production on socioeconomic development and the funding of public policies have been questioned in the literature. The main objective of this study was to analyze the importance of financial compensation – in the form of royalties and special participation – for public financing of local health services in the Norte Fluminense region of Rio de Janeiro State, namely the state bordering on the offshore area that accounts for more than 70% of the oil produced in Brazil. The methodology involved secondary data analysis of municipal health revenues and expenditures in the 2000s. The results suggest that the variation in oil-derived budget funds were correlated to the significant difference in total health spending in the region's municipalities. However, the execution and distribution of health spending by specialty did not occur proportionally to the variation in the availability of revenues. The heavy dependence on oil revenues suggests greater municipal autonomy in health spending when compared to other municipalities in Brazil. The conclusion drawn is that other criteria for the distribution and use of funds are needed in order to equalize spending and streamline governmental actions in the regional sphere.

Key words
Budget; Healthcare financing; Oil; Regional health planning; Regional development