Page 241 - GHES-3-3

Global Health Economics and
Sustainability
Empirical resource allocation in healthcare

the heterogeneity of the distribution of resources among the absence of external regulation. There is an increasing
competitors but are also largely determined by the prevailing gap between those with more resources and those with
resource distribution among economic entities (Idris et al., less.” “The study of Matthew effects [...] explores the
2024). Observations show that competitors who initially mechanisms or processes through which inequalities, once
secure leading positions in a particular market and capture they come into existence, become self-perpetuating and
a significant part of industry resources gain competitive self-amplifying in the absence of intervention, widening
advantages, enabling them to accumulate resources at an the gap between those who have more and those who
accelerated rate (Khemani, 2007). Consequently, the law have less. No theory of stratification is complete without
of distribution of competitors perpetuates the inequality attention to such processes” (Farys & Wolbring, 2021).
and heterogeneity of the competitive environment. As a result, economic entities with a large reserve of
A competitor’s advantage – or, in other words, the quality resources continue to amass even greater resources over time
of a competitor – can be measured by the proportion of (Wang, 2024). “The analysis of the distribution of health
resources they control. Hypothetically, market leaders resources among the five provinces of Northwest China
benefit from increasing returns to scale, or the “network revealed that there were significant differences in equity among
effect,” whereby greater resource accumulation leads to the five provinces of Northwest China, and these differences
enhanced competitive leverage (Fraccascia, 2020). In were mainly derived from non-poor counties. The amount
extreme cases, this dynamic results in the “winner takes of health resources in poor counties remains lower than that
it all” phenomenon, where dominant players monopolize in non-poor counties. Therefore, it is important to ensure the
entire markets (Frank & Cook, 2013). equitable distribution of health resources, also taking into
This model of competition generally refers to an account their utilization and quality” (Zhu et al., 2024).
economy in which more efficient economic actors This fundamental market property of resource and
become beneficiaries of a larger share of wealth, income, income distribution is a consequence of the stochastic
and resources, while others are content with a very multiplicative effect of uneven allocation, commonly
small portion (Borin et al., 2023). The predominance of referred to as the law of distribution of competitors
winner-takes-all markets increases inequalities in wealth (Jahanbakhsh Javid & Amini, 2023). Mathematically,
and opportunity (Laferrière et al., 2023). As a rule, such this effect is modeled as a multiplicative process, where
competition culminates in an oligopoly, where only a small changes in a variable (e.g., a competitor’s quality or market
group of large, influential economic agents exert control share) are proportional to its prior value. The resulting
over most of the market (Devine & Siddiqui, 2023). disparity is driven by the principle of “market efficiency,”

Many researchers believe that the rise of winner-takes- which dictates the economic necessity of unequal resource
all markets has been accelerated by digital and network allocation. Ultimately, this mechanism establishes an
technologies, which reduce barriers to entry (Kolesnichenko ordered market organization based on objective principles
et al., 2024). This effect is particularly evident in the of hierarchy (Bedir, 2016).
platform economy. A case in point is Amazon’s expansion However, economic theories and real-world models also
(Charles & Uford, 2023). Historically, retail markets present alternative systems where wealth accumulation
were fragmented, with numerous regional businesses contributes to the well-being of all societal members
operating independently. However, advancements in (Brulé & Suter, 2019). For example, the economies of
logistics, transportation, telecommunications, and digital Scandinavian countries prioritize social security and
platforms have dismantled geographic constraints, equitable income distribution. While such systems reduce
fostering interregional competition. Large firms leverage economic disparities, they also limit the incentives for
their extensive resources to outcompete smaller, local competition, potentially constraining economic growth
companies, allowing them to capture and retain a large and innovation (Said et al., 2024).
market share in almost all segments they enter (Chen et al., Proponents of the “dirigiste” school of economic
2024).
thought (Akarli, 2024) theoretically justified the need
This phenomenon aligns with the so-called “Matthew for state intervention to regulate the law of distribution
effect of accumulated advantage,” described by the apostle of competitors and promote a more equitable allocation
Matthew: “For unto everyone that hath shall be given, and of resources (Litvinenko et al., 2023). The compensatory
he shall have abundance. But from he that hath not shall be principle, developed by N. Kaldor and J. R. Hicks,
taken away even that which he has” (The Mathew Effect, suggests that public welfare can be maximized if winners
2017). As Rigney (2010) explains: “Inequalities, as soon as in competition fully compensate the losers while still
they arise, become self-reproducing and self-reinforcing in retaining their advantage (Hicks, 1939; Kaldor, 1939).

Volume 3 Issue 3 (2025) 233 https://doi.org/10.36922/ghes.8283