Governance and the Effectiveness of Public Health Subsidies in Ghana, Kenya, and Uganda

Heavily subsidizing essential health products has the potential to substantially decrease child mortality in Sub-Saharan Africa. However, it is an open policy question whether such subsidies can be implemented effectively. The most potentially cost-effective way to implement subsidy programs is to distribute products through existing health facilities, but there is widespread concern that, because health workers are paid a fixed wage and are hard to fire, they may not have strong incentives to implement the programs effectively. A number of studies have shown that the quality of service provision in developing countries can be quite poor,¹ and that petty corruption among public service providers can be high.² Health workers may demand under-the-counter payments from eligible clients (extortion), provide the product to ineligible people (leakage), or provide poor effort generally, for example by failing to attend work or distribute products while at work (shirking). While there is anecdotal evidence that these issues affect subsidized distribution schemes, which has led some governments and international donors to be reluctant to try to set them up, there is little rigorous evidence of the magnitude of these problems.

The study spans three countries: Ghana, Uganda, and Kenya. These countries represent a wide range of perceived corruption levels: According to the 2012 Transparency International Corruption Index, in which the least corrupt country is ranked first, Ghana was ranked 64th, Uganda 130th, and Kenya 139th out of 178 countries.³

In these three countries, researchers audited a WHO-recommended program that is currently only in place in a limited number of countries due to governance concerns: providing free antimalarial bed nets to those most vulnerable to malaria—pregnant women and their unborn children—through antenatal care clinics. At the time of the study, government-led programs were in place in Kenya and Uganda. In Ghana, there was no such government program, but researchers set one up.

This study measured the extent to which extortion, leakage, and shirking undermine the effectiveness of targeted subsidies for preventative health products in Ghana, Kenya, and Uganda. To measure how prevalent these behaviors were, researchers performed innovative audits of bed net distribution programs in all three countries. In Ghana, researchers also conducted a randomized evaluation to understand which program features matter for reducing these problems. The sample consisted of 168 rural health facilities (72 in Ghana, 48 in Kenya, and 48 in Uganda).

Audits: Ghana, Kenya, and Uganda

In all three countries, researchers conducted audits that included a broad set of measures, yielding a comprehensive picture of the performance of health workers. Measurement techniques included audits on health center registers, back-check surveys with prenatal clients, and decoy visits where undercover male enumerators went to health centers to try to obtain bed nets.

Randomized evaluation: Ghana

In Ghana, because researchers implemented the program, they were able to randomly vary several aspects of the program to test specific hypotheses:

·      Direct vs. voucher distribution: Forty-eight health centers were randomly assigned to distribute the bed nets directly, and the other 24 distributed vouchers that could be redeemed for a free net at a local store.

·      Audit vs. no audit: Half of the clinics were randomly assigned to be informed that their performance would be audited and that, if the audits revealed either leakage or extortion, the program would be shut down.

·      Compensation vs. no compensation: In clinics with direct distribution, researchers randomly varied whether health workers received a fixed monthly payment of 100 Ghana cedis (US$60, corresponding to approximately 25 percent of the median monthly health worker salary) for implementing the program.

·      Small vs. large delivery: Within direct distribution clinics, researchers randomly varied whether the stock of bed nets delivered to the health center at the onset of the program was high or low.

Audit Results

In contrast with much of the previous evidence on service delivery in developing countries, researchers found relatively high performance among health workers in all three countries.  

·      Coverage was high: Close to 80 percent of eligible women received the free net at the clinic (and 76 percent of them at their first prenatal visit, as they should have).

·      Extortion was rare: Only 1.4 percent of eligible women were asked to pay bribes.

·      Leakage was limited: Ineligible men who tried to obtain a bed net from the health facility were only successful 4.7 percent of the time and in most of these cases, they received them for free. Less than 10 percent of community members thought an ineligible person could obtain a bed net at the local prenatal center. Administrative records from Ghana suggest that a maximum of 14.7% of nets were leaked to ineligibles. Researchers estimate that this level of leakage only marginally undermines the cost-effectiveness of free bed net distribution schemes, shifting the cost per life saved from US$200-662 to US$234-776, which is still orders of magnitude below the World Bank’s cost-effectiveness threshold of $20,000 per life saved.

These results contrast sharply with the previous literature on service provision in developing countries. Survey data collected by the researchers suggests three likely explanations for why the researchers find such high performance: health workers had higher levels of altruism, intrinsic job motivation, and perceived accountability relative to other workers surveyed (e.g. teachers). These traits were correlated with better performance.

Randomized Evaluation Results

In Ghana, given the high performance observed in their absence, it is not surprising that neither bonus compensation, nor the threat of audits, nor stock size had a meaningful impact on performance. The voucher scheme worsened performance: eligible women were less likely to get a net, and ineligible men were more likely to get a net. This could be due to the fact that the vouchers de-motivated health workers by implying that they were not trusted to distribute nets, or that community awareness of the voucher scheme was lower because vouchers are smaller and less visible.

[1]See, for example: Chaudhury, Nazmul, Jeffrey Hammer, Michael Kremer, Karthik Muralidharan, and F. Halsey Rogers (2006). Missing in Action: Teacher and Health Worker Absence in Developing Countries. Journal of Economic Perspectives 20(1): 91-116.

[2] See, for example: Azeem, Vitus A., Linda Ofori-Kwafo, Evelyn Nuvor, and Mary A. Addah. Realizing the MDGs by 2015: Anti-corruption in Ghana. Ghana Integrity Initiative. Berlin, DE: Transparency International, 2011

[3] Transparency International. “Corruption Perceptions Index 2012.” Available at: http://www.transparency.org/cpi2012/results