article by Abhijit Banerjee, Esther Duflo, and Rachel Glennerster

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In this randomized controlled trial, Banerjee, Duflo, and Glennerster attempted to improve attendance in the health care industry by introducing financial incentives. The results started out positive, but the system was eventually thwarted on the ground.

 

Abstract:

The public Indian health care system is plagued by high staff absence, low effort by providers, and limited use by potential beneficiaries who prefer private alternatives. This article reports the results of an experiment carried out with a district administration and a nongovernmental organization (NGO). The presence of government nurses in government public health facilities (subcenters and aid‐posts) was recorded by the NGO, and the government took steps to punish the worst delinquents. Initially, the monitoring system was extremely effective. This shows that nurses are responsive to financial incentives. But after a few months, the local health administration appears to have undermined the scheme from the inside by letting the nurses claim an increasing number of “exempt days.” Eighteen months after its inception, the program had become completely ineffective. (JEL: D10, I10, J30)

 

Citation:

Abhijit V. Banerjee, Esther Duflo, Rachel Glennerster. “Putting a Band-Aid on a Corpse: Incentives for Nurses in the Indian Public Health Care System.” Journal of the European Economic Association, Volume 6, Issue 2-3, 1 May 2008, Pages 487–500