Governance and the Effectiveness of Public Health Subsidies: Evidence from Ghana, Kenya, and Uganda
Distributing subsidized health products through existing health infrastructure could substantially and cost-effectively improve health in sub-Saharan Africa. There is, however, widespread concern that poor governance – in particular, limited health worker accountability – seriously undermines the effectiveness of subsidy programs. We audit targeted bednet distribution programs to quantify the extent of agency problems. We find that around 80 percent of the eligible receive the subsidy as intended, and up to 15 percent of subsidies are leaked to ineligible people. Supplementing the program with simple financial or monitoring incentives for health workers does not improve performance further and is thus not cost-effective in this context.