Article Text

Download PDFPDF

Impact of financial management centralisation in a health system under austerity: a qualitative study from South Africa
  1. Jodi Wishnia,
  2. Jane Goudge
  1. Centre for Health Policy, Faculty of Health Sciences, School of Public Health, University of the Witwatersrand, Johannesburg, South Africa
  1. Correspondence to Jodi Wishnia; jodiwishnia{at}


Introduction International calls for universal health coverage (UHC) have led many countries to implement health sector reforms, however, since the 2008 global recession, economic growth has slowed in many lower-income and middle-income countries. In a renewed interest in public financial management (PFM), international organisations have emphasised the importance of giving spending control to those responsible for healthcare. However, centralisation is a common response when there is a need to cut expenditure due to a reduced budget; yet failure to decentralise often hampers the achievement of important goals. This paper examines the effect of centralising financial decision-making on the functioning of the South African health system.

Methods We used a case study design with an ethnographic approach. Primary data collection was conducted through participant-observation and semistructured interviews, over 1 year. Member checking was conducted.

Results New management implemented centralisation due to a reduced budget, a history of financial mismanagement, the punitive regulatory environment financial managers face, and their fear of poor audit outcomes. The reform, together with an authoritarian management style to ensure compliance, created a large power distance between financial and clinical managers. District managers felt that there was poor communication about the reform and that decision-making was opaque. This lowered commitment to the reform, even for those who thought it was necessary. It also reduced communal action, creating an individualistic environment. The authoritarian management style, and the impact of centralisation on service delivery, negatively affected planning and decision making, impairing organisational functioning.

Conclusion As public health systems become even more financially constrained, recognising how PFM reforms can influence organisational culture, and how the negative effects can be mitigated, is of international importance. We highlight the importance of a participatory culture that encourages shared decision making and coproduction, particularly as countries grapple with how to achieve UHC with limited funds.

  • health systems
  • public health
  • health policy

This is an open access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited, appropriate credit is given, any changes made indicated, and the use is non-commercial. See:

View Full Text

Statistics from


  • Handling editor Stephanie M Topp

  • Twitter @jodi_wishnia

  • Contributors Both authors conceived of and planned the paper. JW is the principal researcher and conducted data collection and primary data analysis. JG reviewed the data analysis results and provided expert guidance. JW was the primary manuscript writer, with JG providing detailed input. Both authors approved the final version of the manuscript.

  • Funding JW’s research is funded by the South African Research Chair Initiative.

  • Competing interests None declared.

  • Patient and public involvement Patients and/or the public were not involved in the design, or conduct, or reporting, or dissemination plans of this research.

  • Patient consent for publication Not required.

  • Ethics approval Ethical approval was granted by the University of Witwatersrand’s Human Research Ethics Committee (Medical) (M170346) and the PDoHs research committee.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Data availability statement All data relevant to the study are included in the article or uploaded as online supplemental information. All relevant data are included in the paper.

Request Permissions

If you wish to reuse any or all of this article please use the link below which will take you to the Copyright Clearance Center’s RightsLink service. You will be able to get a quick price and instant permission to reuse the content in many different ways.