We study the institutional solutions needed in a decentralized framework to cope with the potential adverse welfare effects caused by localized negative shocks, that impact on the provision of public services and that can be limited by precautionary investments. We consider first a public relief...

We exploit time variation across Italian Regions in the implementation of a prospective pay systems (PPS) for hospitals based on Diagnosis Related Groups (DRGs) to assess their impact on self-assessed health status and on the use of health care services. We consider a survey of more than 600,000...