IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v48y2013icp71-87.html
   My bibliography  Save this article

Institutional Solutions to the Asymmetric Information Problem in Health and Development Services for the Poor

Author

Listed:
  • Leonard, David K.
  • Bloom, Gerald
  • Hanson, Kara
  • O’Farrell, Juan
  • Spicer, Neil

Abstract

The world’s poorest pay for professional services and thus are in a “market,” whether the services are provided in the public or private sectors. The associated problems of unequal information are particularly acute in undergoverned countries, where state regulation is weak. We systematically review the evidence on solutions to these problems in a variety of professions. Payments by clients are more likely to have a positive effect on quality if they are made through locally-managed organizations rather than directly to individual practitioners, particularly if those organizations have an institutionalized history of other—regarding values and incorporate client participation.

Suggested Citation

  • Leonard, David K. & Bloom, Gerald & Hanson, Kara & O’Farrell, Juan & Spicer, Neil, 2013. "Institutional Solutions to the Asymmetric Information Problem in Health and Development Services for the Poor," World Development, Elsevier, vol. 48(C), pages 71-87.
    • Handle: RePEc:eee:wdevel:v:48:y:2013:i:c:p:71-87
    DOI: 10.1016/j.worlddev.2013.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X13000971
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2013.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Kherallah, Mylene & Kirsten, Johann F, 2002. "The New Institutional Economics: Applications For Agricultural Policy Research In Developing Countries," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(2).
    3. Palmer, Natasha & Mills, Anne, 2005. "Contracts in the real world: Case studies from Southern Africa," Social Science & Medicine, Elsevier, vol. 60(11), pages 2505-2514, June.
    4. Abhijit Banerjee & Esther Duflo, 2006. "Addressing Absence," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 117-132, Winter.
    5. Leonard, Kenneth L, 2007. "Learning in Health Care: Evidence of Learning about Clinician Quality in Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 55(3), pages 531-555, April.
    6. Tibandebage, Paula & Mackintosh, Maureen, 2005. "The market shaping of charges, trust and abuse: health care transactions in Tanzania," Social Science & Medicine, Elsevier, vol. 61(7), pages 1385-1395, October.
    7. Sima Berendes & Peter Heywood & Sandy Oliver & Paul Garner, 2011. "Quality of Private and Public Ambulatory Health Care in Low and Middle Income Countries: Systematic Review of Comparative Studies," PLOS Medicine, Public Library of Science, vol. 8(4), pages 1-10, April.
    8. Abhijit V. Banerjee & Esther Duflo, 2010. "Giving Credit Where It Is Due," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 61-80, Summer.
    9. Peters, David H. & Muraleedharan, V.R., 2008. "Regulating India's health services: To what end? What future?," Social Science & Medicine, Elsevier, vol. 66(10), pages 2133-2144, May.
    10. Conning, Jonathan & Udry, Christopher, 2007. "Rural Financial Markets in Developing Countries," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 56, pages 2857-2908, Elsevier.
    11. Spicer, Neil & Harmer, Andrew & Aleshkina, Julia & Bogdan, Daryna & Chkhatarashvili, Ketevan & Murzalieva, Gulgun & Rukhadze, Natia & Samiev, Arnol & Walt, Gill, 2011. "Circus monkeys or change agents? Civil society advocacy for HIV/AIDS in adverse policy environments," Social Science & Medicine, Elsevier, vol. 73(12), pages 1748-1755.
    12. Kenneth L. Leonard & Melkiory C. Masatu & Alexandre Vialou, 2007. "Getting Doctors to Do Their Best: The Roles of Ability and Motivation in Health Care Quality," Journal of Human Resources, University of Wisconsin Press, vol. 42(3).
    13. Kherallah, Mylène & Kirsten, Johann, 2001. "The new institutional economics," MTID discussion papers 41, International Food Policy Research Institute (IFPRI).
    14. Leonard, Kenneth & Masatu, Melkiory C., 2006. "Outpatient process quality evaluation and the Hawthorne Effect," Social Science & Medicine, Elsevier, vol. 63(9), pages 2330-2340, November.
    15. Edwards, Michael & Hulme, David, 1996. "Too close for comfort? the impact of official aid on nongovernmental organizations," World Development, Elsevier, vol. 24(6), pages 961-973, June.
    16. Solava Ibrahim & David Hulme, 2010. "Has civil society helped the poor? - A review of the roles and contributions of civil society to poverty reduction?," Global Development Institute Working Paper Series 11410, GDI, The University of Manchester.
    17. Mohammad Amin & Kara Hanson & Anne Mills, 2004. "Price discrimination in obstetric services – a case study in Bangladesh," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 597-604, June.
    18. Bloom, Gerald, 2011. "Building institutions for an effective health system: Lessons from China's experience with rural health reform," Social Science & Medicine, Elsevier, vol. 72(8), pages 1302-1309, April.
    19. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    20. Ensor, Tim & Weinzierl, Sabine, 2007. "Regulating health care in low- and middle-income countries: Broadening the policy response in resource constrained environments," Social Science & Medicine, Elsevier, vol. 65(2), pages 355-366, July.
    21. Standing, H. & Chowdhury, A. Mushtaque R., 2008. "Producing effective knowledge agents in a pluralistic environment: What future for community health workers?," Social Science & Medicine, Elsevier, vol. 66(10), pages 2096-2107, May.
    22. Sanjay Basu & Jason Andrews & Sandeep Kishore & Rajesh Panjabi & David Stuckler, 2012. "Comparative Performance of Private and Public Healthcare Systems in Low- and Middle-Income Countries: A Systematic Review," PLOS Medicine, Public Library of Science, vol. 9(6), pages 1-14, June.
    23. Stephen Knowles & P. Dorian Owen, 2010. "Which Institutions are Good for Your Health? The Deep Determinants of Comparative Cross-country Health Status," Journal of Development Studies, Taylor & Francis Journals, vol. 46(4), pages 701-723.
    24. Schick, Allen, 1998. "Why Most Developing Countries Should Not Try New Zealand's Reforms," The World Bank Research Observer, World Bank, vol. 13(1), pages 123-131, February.
    25. Jishnu Das & Jeffrey Hammer & Kenneth Leonard, 2008. "The Quality of Medical Advice in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 93-114, Spring.
    26. Harry Anthony Patrinos & Felipe Barrera-Osorio & Juliana Guaqueta, 2009. "The Role and Impact of Public-Private Partnerships in Education," World Bank Publications - Books, The World Bank Group, number 2612, December.
    27. Bratton, Michael, 1989. "The politics of government-NGO relations in Africa," World Development, Elsevier, vol. 17(4), pages 569-587, April.
    28. Uwe Dulleck & Rudolf Kerschbamer & Matthias Sutter, 2011. "The Economics of Credence Goods: An Experiment on the Role of Liability, Verifiability, Reputation, and Competition," American Economic Review, American Economic Association, vol. 101(2), pages 526-555, April.
    29. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    30. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    31. Bloom, Gerald & Standing, Hilary & Lloyd, Robert, 2008. "Markets, information asymmetry and health care: Towards new social contracts," Social Science & Medicine, Elsevier, vol. 66(10), pages 2076-2087, May.
    32. Leonard, Kenneth L., 2009. "The cost of imperfect agency in health care: Evidence from rural Cameroun," Journal of Development Economics, Elsevier, vol. 88(2), pages 282-291, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lewis Husain & Gerald Bloom & Yue Xiao, 2023. "Building policy capacity for managing rapid, complex change in China’s health system," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 42(1), pages 28-48.
    2. Batley, Richard & Mcloughlin, Claire, 2015. "The Politics of Public Services: A Service Characteristics Approach," World Development, Elsevier, vol. 74(C), pages 275-285.
    3. Ebata, A. & Win, K.S. & Loevinsohn, M. & Macgregor, H., 2018. "Value chain governance and institutions behind biosecurity along pig value chains in Myanmar," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277082, International Association of Agricultural Economists.
    4. Bach Nguyen & Nguyen Phuc Canh & Su Dinh Thanh, 2021. "Institutions, Human Capital and Entrepreneurship Density," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(3), pages 1270-1293, September.
    5. Chakrabarty, Himadri Shekhar & Roy, Rudra Prosad, 2021. "Pandemic uncertainties and fiscal procyclicality: A dynamic non-linear approach," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 664-671.
    6. Simon Batchelor & Linda Waldman & Gerry Bloom & Sabrina Rasheed & Nigel Scott & Tanvir Ahmed & Nazib Uz Zaman Khan & Tamanna Sharmin, 2015. "Understanding Health Information Seeking from an Actor-Centric Perspective," IJERPH, MDPI, vol. 12(7), pages 1-22, July.
    7. Huynh, Cong Minh & Le, Quoc Nha, 2022. "A multi-dimensional free market and income inequality in developing Asia: How does the quality of governance matter?," MPRA Paper 112013, University Library of Munich, Germany.
    8. Iván Major, 2019. "Two-Sided Information Asymmetry in the Healthcare Industry," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 25(2), pages 177-193, May.
    9. Hunter, Benjamin M. & Murray, Susan F. & Marathe, Shweta & Chakravarthi, Indira, 2022. "Decentred regulation: The case of private healthcare in India," World Development, Elsevier, vol. 155(C).
    10. Railey, Ashley F. & Lankester, Felix & Lembo, Tiziana & Reeve, Richard & Shirima, Gabriel & Marsh, Thomas L., 2019. "Enhancing livestock vaccination decision-making through rapid diagnostic testing," World Development Perspectives, Elsevier, vol. 16(C).
    11. Cristia, Julian & Prado, Ariadna García & Peluffo, Cecilia, 2015. "The Impact of Contracting in and Contracting out Basic Health Services: The Guatemalan Experience," World Development, Elsevier, vol. 70(C), pages 215-227.
    12. Nguyen, Phuc Canh & Nguyen, Bach & Thanh, Su Dinh, 2022. "The importance of export diversification for national entrepreneurship density," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 114-129.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heather Klemick & Kenneth L. Leonard & Melkiory C. Masatu, 2007. "Defining Access to Health Care: Evidence on the Importance of Quality and Distance in Rural Tanzania," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 347-358.
    2. Leonard, Kenneth L., 2009. "The cost of imperfect agency in health care: Evidence from rural Cameroun," Journal of Development Economics, Elsevier, vol. 88(2), pages 282-291, March.
    3. Cammett, Melani & Şaşmaz, Aytuğ, 2017. "Political Context, Organizational Mission, and the Quality of Social Services: Insights from the Health Sector in Lebanon," World Development, Elsevier, vol. 98(C), pages 120-132.
    4. Leonard, Kenneth L. & Adelman, Sarah W. & Essam, Timothy, 2009. "Idle chatter or learning? Evidence of social learning about clinicians and the health system from rural Tanzania," Social Science & Medicine, Elsevier, vol. 69(2), pages 183-190, July.
    5. Edward N. Okeke & Amalavoyal V. Chari, 2015. "Can Institutional Deliveries Reduce Newborn Mortality? Evidence from Rwanda," Working Papers WR-1072, RAND Corporation.
    6. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    7. Scott Shane, 2001. "Organizational Incentives and Organizational Mortality," Organization Science, INFORMS, vol. 12(2), pages 136-160, April.
    8. Bloom, Gerald, 2011. "Building institutions for an effective health system: Lessons from China's experience with rural health reform," Social Science & Medicine, Elsevier, vol. 72(8), pages 1302-1309, April.
    9. Alexander Brink, 2010. "Enlightened Corporate Governance: Specific Investments by Employees as Legitimation for Residual Claims," Journal of Business Ethics, Springer, vol. 93(4), pages 641-651, June.
    10. Leonard, Kenneth L. & Masatu, Melkiory C., 2010. "Using the Hawthorne effect to examine the gap between a doctor's best possible practice and actual performance," Journal of Development Economics, Elsevier, vol. 93(2), pages 226-234, November.
    11. Holmstrom, Bengt R. & Tirole, Jean, 1989. "The theory of the firm," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 2, pages 61-133, Elsevier.
    12. Miller, Rosalind & Hutchinson, Eleanor & Goodman, Catherine, 2018. "‘A smile is most important.’ Why chains are not currently the answer to quality concerns in the Indian retail pharmacy sector," Social Science & Medicine, Elsevier, vol. 212(C), pages 9-16.
    13. Jishnu Das, 2011. "The Quality of Medical Care in Low-Income Countries: From Providers to Markets," PLOS Medicine, Public Library of Science, vol. 8(4), pages 1-2, April.
    14. Zachary Wagner & Somalee Banerjee & Manoj Mohanan & Neeraj Sood, 2023. "Does the market reward quality? Evidence from India," International Journal of Health Economics and Management, Springer, vol. 23(3), pages 467-505, September.
    15. Kjell Hausken & Mthuli Ncube, 2014. "Political Economy of Service Delivery: Monitoring Versus Contestation," The Developing Economies, Institute of Developing Economies, vol. 52(1), pages 68-84, March.
    16. Brock, J. Michelle & Lange, Andreas & Leonard, Kenneth L., 2018. "Giving and promising gifts: Experimental evidence on reciprocity from the field," Journal of Health Economics, Elsevier, vol. 58(C), pages 188-201.
    17. Vining, Aidan R. & Globerman, Steven, 1999. "Contracting-out health care services: a conceptual framework," Health Policy, Elsevier, vol. 46(2), pages 77-96, January.
    18. Giorgio Coricelli & Luigi Luini, 1999. "Double Moral Hazard: an Experiment on Warranties," CEEL Working Papers 9901, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    19. Zhang, Y., 2001. "Economics of transaction costs saving forestry," Ecological Economics, Elsevier, vol. 36(2), pages 197-204, February.
    20. Mæstad, Ottar & Torsvik, Gaute & Aakvik, Arild, 2010. "Overworked? On the relationship between workload and health worker performance," Journal of Health Economics, Elsevier, vol. 29(5), pages 686-698, September.
    21. Dow,Gregory K., 2019. "The Labor-Managed Firm," Cambridge Books, Cambridge University Press, number 9781107589650.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:48:y:2013:i:c:p:71-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.