Entry barriers and medical board funding autonomy

In this paper we develop and test the hypothesis that institutional funding arrangments affect the extent to which public agencies are influenced by special interests. We test this hypothesis using data on state medical boards. In 1989, medical boards in twenty-one states received budget appropriations from their legislatures. The remaining boards operated independent of legislative control, financing their activities from fees and other revenues. We find that budgetary autonomy does influence agency decisions. The ability of physicians to restrict entry is enhanced where licensing boards are self-financed.