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When financial incentives backfire: Evidence from a community health worker experiment in Uganda

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  • Wagner, Zachary
  • Asiimwe, John Bosco
  • Levine, David I.

Abstract

There is growing support for an entrepreneurial community health worker (CHW) model, but the benefits of such a design are unclear. We randomly assigned CHWs in Uganda to sell treatment for child diarrhea door-to-door and retain the profits or to deliver treatment to homes for free. We find that, despite stronger financial incentives, the entrepreneurial model led to substantially less effort (fewer household visits) than the free delivery model. Qualitative evidence suggests that selling had a social penalty whereas free distribution was socially rewarding. Our results call into question the notion that an entrepreneurial model necessarily increases CHW effort relative to free distribution.

Suggested Citation

  • Wagner, Zachary & Asiimwe, John Bosco & Levine, David I., 2020. "When financial incentives backfire: Evidence from a community health worker experiment in Uganda," Journal of Development Economics, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:deveco:v:144:y:2020:i:c:s0304387819307801
    DOI: 10.1016/j.jdeveco.2019.102437
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    References listed on IDEAS

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    5. Zachary Wagner & John Bosco Asiimwe & William H Dow & David I Levine, 2019. "The role of price and convenience in use of oral rehydration salts to treat child diarrhea: A cluster randomized trial in Uganda," PLOS Medicine, Public Library of Science, vol. 16(1), pages 1-18, January.
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    7. Erika Deserranno, 2019. "Financial Incentives as Signals: Experimental Evidence from the Recruitment of Village Promoters in Uganda," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 277-317, January.
    8. Pascaline Dupas & Basimenye Nhlema & Zachary Wagner & Aaron Wolf & Emily Wroe, 2023. "Expanding Access to Clean Water for the Rural Poor: Experimental Evidence from Malawi," American Economic Journal: Economic Policy, American Economic Association, vol. 15(1), pages 272-305, February.
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    Cited by:

    1. Buntaine, Mark T & Bagabo, Alex & Bangerter, Tanner & Bukuluki, Paul & Daniels, Brigham, 2022. "Recognizing Local Leaders as an Anti-Corruption Strategy: Experimental and Ethnographic Evidence from Uganda," OSF Preprints x86q3, Center for Open Science.
    2. Pascaline Dupas & Basimenye Nhlema & Zachary Wagner & Aaron Wolf & Emily Wroe, 2023. "Expanding Access to Clean Water for the Rural Poor: Experimental Evidence from Malawi," American Economic Journal: Economic Policy, American Economic Association, vol. 15(1), pages 272-305, February.
    3. Ozbek, Kemal, 2023. "Adaptive risk assessments," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    4. Qian, Nancy & Deserranno, Erika, 2020. "Aid Crowd-Out: The Effect of NGOs on Government-Provided Public Services," CEPR Discussion Papers 14755, C.E.P.R. Discussion Papers.
    5. Erika Deserranno & Aisha Nansamba & Nancy Qian, 2020. "The Unintended Consequences of NGO-Provided Aid on Government Services in Uganda," NBER Working Papers 26928, National Bureau of Economic Research, Inc.
    6. Rubli, Adrian, 2023. "Trade-offs between access and quality in healthcare: Evidence from retail clinics in Mexico," Journal of Public Economics, Elsevier, vol. 224(C).
    7. Marvin Deversi & Lisa Spantig, 2023. "Incentive and Signaling Effects of Bonus Payments: An Experiment in a Company," CESifo Working Paper Series 10302, CESifo.
    8. Attema, Arthur E. & Galizzi, Matteo M. & Groß, Mona & Hennig-Schmidt, Heike & Karay, Yassin & L’Haridon, Olivier & Wiesen, Daniel, 2023. "The formation of physician altruism," Journal of Health Economics, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    Community health workers; Social entrepreneurship; Financial incentives; Social incentives; Targeting; Child health; Motivation;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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