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Although many study the effects of different allocations of health policy authority, few ask why countries assign responsibility over different policies as they do. We test two broad theories: fiscal federalism, which predicts rational governments will concentrate information-intensive operations at lower levels, and redistributive and regulatory functions at higher levels; and “politicized federalism,” which suggests a combination of systematic and historically idiosyncratic political variables interfere with efficient allocation of authority. Drawing on the WHO Health in Transition country profiles, we present new data on the allocation of responsibility for key health care policy tasks (implementation, provision, finance, regulation, and framework legislation) and policy areas (primary, secondary and tertiary care, public health and pharmaceuticals) in the 27 eu member states and Switzerland. We use a Bayesian multinomial mixed logit model to analyze how different countries arrive at different allocations of authority over each task and area of health policy, and find the allocation of powers broadly follows fiscal federalism. Responsibility for pharmaceuticals, framework legislation, and most finance lodges at the highest levels of government, acute and primary care in the regions, and provision at the local and regional levels. Where allocation does not follow fiscal federalism, it appears to reflect ethnic divisions, the population of states and regions, the presence of mountainous terrain, and the timing of region creation.

Replication:  Data and code to reproduce the main results can be found here.