Encouraging Service Delivery to the Poor: Does Money Talk When Health Workers are Pro-Poor?

Abstract

Do service providers respond to pecuniary incentives to serve the poor? Service delivery to the poor is complicated by the extra effort required to deliver services to them and the intrinsic incentives of service providers to exert this effort. Incentive schemes typically fail to account for these complications. A lab-in-the-field experiment with nearly 400 health workers in rural Burkina Faso provides strong evidence that the interaction of effort costs, ability, and intrinsic and extrinsic incentives significantly influences service delivery to the poor. Health workers reviewed video vignettes of medical cases involving poor and nonpoor patients under a variety of bonus schemes. Bonuses to serve the poor have less impact on effort than bonuses to serve the nonpoor; health workers who receive equal bonuses to serve poor and nonpoor patients see fewer poor patients than workers who receive only a flat salary; and bonuses operate largely through their influence onthe behavior of pro-poor workers. The paper also presents novel evidence on the selection effects of contract type: pro-poor workers prefer the flat salary contract to the variable salary contract.

Keywords: Health Care Services Industry, Health Service Management and Delivery, Population & Development, Educational Sciences