Improving Health in Developing Countries

We summarize evidence from the growing body of randomized evaluations on health in developing countries from the perspective of the human capital investment model, cost-effectiveness analysis, and behavioral economics. Many cost-effective methods of infectious disease prevention have limited uptake. Contributing factors include externalities from infectious disease prevention, public goods problems, liquidity constraints, and behavioral factors, such as present bias and limited attention. Across a variety of contexts, consumer use of cost-effective products for prevention and non-acute care is highly sensitive to price and convenience. Health education has a mixed record, often working in combination with incentives and functioning through increasing salience rather than delivering information. The quality of health services in many developing countries is very poor, with weak incentives for public sector health workers. Reforms that strengthen incentives show promise but institutional details matter. Programs based on this more nuanced understanding of health decision making can save millions of lives.