The Governance of Non-Profits and their Social Impact: Evidence from a Randomized Program in Healthcare in the Democratic Republic of Congo

80 Pages Posted: 23 Oct 2019 Last revised: 21 Feb 2023

See all articles by Anicet Fangwa

Anicet Fangwa

HEC PARIS

Caroline Flammer

Columbia University; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Marieke Huysentruyt

HEC Paris

Bertrand V. Quelin

HEC Paris

Date Written: Februrary 19, 2023

Abstract

Substantial funding is provided to the healthcare systems of low-income countries. However, an important challenge is to ensure that this funding be used efficiently. This challenge is complicated by the fact that a large share of healthcare services in low-income countries is provided by non-profit health centers that often lack i) effective governance structures and ii) organizational know-how and adequate training. In this paper, we argue that the bundling of performance-based incentives with auditing and feedback (A&F) is a potential way to overcome these obstacles. First, the combination of feedback and performance-based incentives -- that is, feedback joint with incentives to act on this feedback and achieve specific health outcomes -- helps address the knowledge gap that may otherwise undermine performance-based incentives. Second, coupling feedback with auditing helps ensure that the information underlying the feedback is reliable -- a prerequisite for effective feedback. To examine the effectiveness of this bundle, we use data from a randomized governance program conducted in the Democratic Republic of Congo. Within the program, a set of health centers were randomly assigned to a "governance treatment" that consisted of performance-based incentives combined with A&F, while others were not. Consistent with our prediction, we find that the governance treatment led to i) higher operating efficiency and ii) improvements in health outcomes. Furthermore, we find that funding is not a substitute for the governance treatment -- health centers that only receive funding increase their scale, but do not show improvements in operating efficiency nor health outcomes.

Keywords: non-profit governance, non-profit organizations, social impact, healthcare, Sustainable Development Goals (SDGs), developing countries, randomized experiment

JEL Classification: O, Q01, A1, D1, D2, D6, D8, F63, G3, I1

Suggested Citation

Fangwa, Anicet and Flammer, Caroline and Huysentruyt, Marieke and Quélin, Bertrand V., The Governance of Non-Profits and their Social Impact: Evidence from a Randomized Program in Healthcare in the Democratic Republic of Congo (Februrary 19, 2023). HEC Paris Research Paper No. SPE-2019-1354, Available at SSRN: https://ssrn.com/abstract=3469543 or http://dx.doi.org/10.2139/ssrn.3469543

Anicet Fangwa

HEC PARIS ( email )

1 rue de la Liberation
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Caroline Flammer (Contact Author)

Columbia University ( email )

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HOME PAGE: http://www.columbia.edu/~cf2870/

National Bureau of Economic Research (NBER) ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Belgium

Marieke Huysentruyt

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Bertrand V. Quélin

HEC Paris ( email )

Jouy-en-Josas Cedex, 78351
France

HOME PAGE: http://www.hec.fr/quelin

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