Governance and the Effectiveness of Public Health Subsidies: Evidence from Ghana, Kenya and Uganda
44 Pages Posted: 7 Mar 2019
Date Written: July 11, 2017
Distributing subsidized health products through existing health infrastructure could substantially and cost-effectively improve health in sub-Saharan Africa. There is, however, widespread concern that poor governance – in particular, limited health worker accountability – seriously undermines the effectiveness of subsidy programs. We audit targeted bednet distribution programs to quantify the extent of agency problems. We find that around 80% of the eligible receive the subsidy as intended, and up to 15% of subsidies are leaked to ineligible people. Supplementing the program with simple financial or monitoring incentives for health workers does not improve performance further and is thus not cost-effective in this context.
Keywords: leakage, extortion, shirking, motivation
JEL Classification: D73, H11, I15, I38
Suggested Citation: Suggested Citation