Health or wealth? The impact of pairing assistance on the health sector in China

Pairing assistance, as a typical form of horizontal transfer payments in China, serves as an important policy instrument for enhancing the economic development of underdeveloped regions, particularly in improving the level of healthcare service provision. This study analyzes the healthcare performance of pairing assistance using city-level panel data from 2004 to 2017 and a difference-in-differences (DID) approach. We find that pairing assistance has not significantly improved the level of healthcare service provision. It arises from its dual impact: while pairing assistance increases the financial resources available to recipients, it also intensifies their expenditure preference for ‘prioritizing infrastructure construction over services’, to a greater extent. As a result, the level of healthcare service provision is finally reduced. Additionally, establishing a scientifically matched pairing relationship is more effective in enhancing the level of healthcare service provision than simply emphasizing the donor’s level of development.