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Leakage of Public Resources in the Health Sector: An Empirical Investigation of Chad

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  • Bernard Gauthier
  • Waly Wane

Abstract

In the public sector in developing countries, leakage of public resources could prove detrimental to users and affect the well-being of the population. In this paper, we empirically examine the importance of leakage of government resources in the health sector in Chad and its effects on medication mark-up. We make use of data collected in Chad as part of a Health Facilities Survey organized by the World Bank in 2004. The survey covers 281 primary health care centers and hospitals and contains information on the provision of medical material, financial resources and medication allocated by the Ministry of Health (MoH) to the regional administration and primary health centers. While the regional administration is officially allocated 60% of the MoH’s non-wage recurrent expenditures, the share of the resources that actually reach the regions is estimated to be 18%. The health centers, which are the frontline providers and the entry point for the population, receive less than 1% of the MoH’s non-wage recurrent expenditures. Accounting for the endogeneity of the level of competition among health centers, we observe that leakage of government resources has a significant and negative impact on the mark-up health centers charge patients on drugs sales. Furthermore, it is estimated that had public resources earmarked for frontline providers reached them in their entirety, the number of patients seeking primary health care in Chad would have more than doubled.

Suggested Citation

  • Bernard Gauthier & Waly Wane, 2008. "Leakage of Public Resources in the Health Sector: An Empirical Investigation of Chad," Discussion Papers 2_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  • Handle: RePEc:prt:dpaper:2_2008
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    File URL: http://economia.uniparthenope.it/ise/sito/DP/DP_2_2008.pdf
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    Cited by:

    1. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2015. "Aid on Demand: African Leaders and the Geography of China's Foreign Assistance," CEPR Discussion Papers 10704, C.E.P.R. Discussion Papers.
    2. Ehizuelen Michael Mitchell Omoruyi, 2016. "The Dragon's Goodwill: Examining China's External Finance and African Leaders' Preferentialism," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-30, October.
    3. Devarajan, Shantayanan & Khemani, Stuti & Walton, Michael, 2011. "Civil society, public action and accountability in Africa," Policy Research Working Paper Series 5733, The World Bank.
    4. Devarajan, Shantayanan & Shetty, Sudhir, 2010. "Africa: Leveraging the Crisis into a Development Takeoff," World Bank - Economic Premise, The World Bank, issue 30, pages 1-4, September.
    5. Lewis, Maureen & Pettersson, Gunilla, 2009. "Governance in health care delivery : raising performance," Policy Research Working Paper Series 5074, The World Bank.
    6. Bold, Tessa & Gauthier, Bernard & Svensson, Jakob & Wane, Waly, 2010. "Delivering service indicators in education and health in Africa : a proposal," Policy Research Working Paper Series 5327, The World Bank.
    7. World Bank, 2008. "Immunization Resource Tracking Exercise : Case Study on the Republic of Tajikistan," World Bank Other Operational Studies 8116, The World Bank.
    8. Mikami, Satoru & Furukawa, Mitsuaki, 2016. "Outsourced Technical Cooperation Reconsidered: Agency Problems in the Support of Decentralized Public Service Delivery in Sierra Leone," Working Papers 119, JICA Research Institute.

    More about this item

    Keywords

    Corruption; public expenditure; primary health care;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other

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