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Paying for what you get in Rwanda

Blog Post2 min read

Developing country governments around the world write lengthy and colorful plans and guidelines and spend much money on programs intended to improve health of poor people living in remote places. Much of this, however, does no good whatsoever. One key reason is that that front-line workers – doctors and nurses, sanitation motivators, village health aides, latrine builders – often do not do the jobs assigned to them by the colorful plans written in distant capitals. As one important survey showed, doctors and nurses often simply do not show up to work.

It may be easy to point a blaming finger at these would-be workers, but solving the problem is not so simple. If people are consistently and ordinarily not doing their “job” then there is clearly some defect in the institutions and systems that assign the job to them. The people working in rural places whose job it is to ultimately implement schemes have very little accountability (it is hard to know if somebody does a good job in a remote place) and face few punishments or rewards for what they do. So, they have little incentive to do their “jobs,” and little happens. Would you go to work every day if nothing happened if you didn’t?

Of course, without these workers, clever schemes and millions of dollars spent are all worth very little. So, a key theme of rice’s work is to better understand the incentives facing local implementers and how they can be improved. This fall, we’re planning to test out some variants on a program that offers local village leaders a cash reward for motivating their villages to reduce open defecation, a key threat to child health. A key principle of economics is that “people respond to incentives,” but getting the details of an incentive scheme right for a particular context can be complex.

For all of these reasons, I was glad to find in my email this morning a new NBER working paper by Paul Gertler and Christel Vermeersch, “Using performance incentives to improve medical care productivity and health outcomes.” They evaluated a program in Rwanda which offered some health service providers incentive pay based on the number of people using health services and the quality of the care. For example, doctors got paid more if the children they saw ended up fully vaccinated. The program improved child health, and in particular children exposed to the program weighed more and grew taller. Interestingly, the effect was largest on doctors who were the most competent, suggesting both that effort really is a binding constraint, and (obviously enough) that incentives alone cannot generate good outcomes if actors are incapable of delivering.

So, what does this tell us about improving child health in rural north India? One of the hardest parts of an incentive scheme such as this is figuring out who deserves the incentive and paying it accordingly. If bosses are not willing to actually implement the rewards – if, for example, well connected local bureaucrats get the prize no matter what they do – then there is no real incentive at all.

Gertler and Vermeersch explain that in their case, the Ministry of Health – the very high ranking bosses of the health service providers – “conducted a survey of face-to-face interviews with approximately 1,000 patients to verify the accuracy of the records. False reporting on patients or services was less than 5 percent.” In other words, the central government was willing and able to find out the truth and hold local agents responsible. Similar incentive schemes in India have broken down exactly because nobody performed this essential role.

Local service delivery is a critical constraint on improving lives for poor children. Accurately administered incentives can help – if backed by the political will to stick to them. Would the Indian government be as able as the Rwandan government to achieve such an effective incentive?

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r.i.c.e. is a nonprofit research organization, dedicated to understanding the lives of poor people, especially young children, in India, and to promoting their well-being.

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