Two major questions to which public policy analysis has been addressed concern the relative influence of economic and political factors upon governmental policy, and the degree of linkage between government spending and the policy outcomes produced by these outlays. These questions are examined with data on health care policy in Yugoslav local governments (communes). A causal model is constructed to estimate the relationships among five conceptual stages in the policy process: (1) socioeconomic context (regional culture and economic structure), (2) political context (liberalism and bureaucratism), (3) government spending level (health spending per capita), (4) policy outputs (hospital beds and doctors per capita), and (5) policy outcomes (percentage of births and deaths with medical attention, and infant mortality rate). The causal model shows that political determinants of policy are much more important than economic ones among Yugoslav communes. Bureaucratization and political liberalism are clearly much more important than development context in determining spending levels; and bureaucratization has by far the greatest impact on health outputs. Popular political culture, rather than economic context, furthermore, emerges as the predominant influence on health outcomes. These causal patterns also indicate the existence of substantial discontinuities among the three stages of the policy process because health spending has only a marginal influence on outputs and because outputs and outcomes are only slightly related at best. What Sharkansky calls the previous investment necessary to create bureaucratic complexes explains the first discontinuity, whereas the second results from different cultural mores about ‘health behavior’ and about interactions with governmental authorities and with the modern world in general.
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