Power Dynamics and Public Well-being: VAT Allocation, Local Governments, and Health Inequality in Thailand

Abstract

Fiscal decentralization in the public health sector is not merely an administrative mechanism for task delegation but a structural realignment of power relations between the central government and local administrative organizations (LAOs). This power reconfiguration significantly influences the capacity of local governments to deliver equitable health services and address systemic disparities. This study aims to examine the structural relationship between the allocation of value-added tax (VAT), as mandated by the Decentralization Act, and a set of macro-level indicators, including public health outcomes, social investment, and income inequality in Thailand. Pearson’s correlation analysis was employed to assess the associations among these variables. The findings reveal that increased VAT allocation is positively correlated with life expectancy and public health expenditure, and negatively correlated with the Gini index, birth rate, and hospital bed density. These patterns reflect the structural dynamics of local fiscal power and its implications for proactive health governance. The analysis also highlights the persistent limitations of a centralized fiscal structure that may hinder sustainable subnational development. This research underscores that meaningful decentralization must go beyond the redistribution of fiscal resources. It requires institutional capacity-building, policy autonomy for local actors, and the establishment of participatory governance mechanisms. Ultimately, public well-being should emerge not merely as a technical outcome of budgetary flows but as a reflection of social justice and inclusive policymaking rooted in local empowerment.