Working for God? evualuating service delivery of religious not-for-profit health care providers in Uganda

Reinikka and Svensson exploit a unique micro-level data set on primary health care facilities in Uganda to address the question: What motivates religious not-for-profit (RNP) health care providers? The authors use two approaches to identify whether an altruistic (religious) effect exists in the data. First, examining cross-section variation, they show that RNP facilities hire qualified medical staff below the market wage, are more likely to provide propoor services and services with a public good element, and charge lower prices for services than for-profit facilities, although they provide a similar (observable) quality of care. RNP and for-profit facilities both provide better quality care than their government counterparts, although government facilities have better equipment. These findings are consistent with the view that RNP facilities are driven in part by altruistic concerns and that these preferences matter quantitatively. Second, the authors exploit a near natural experiment in which the government initiated a program of financial aid for the RNP sector. They show that financial aid leads to more laboratory testing of suspected malaria and intestinal worm cases, and hence higher quality of service and lower prices, but only in RNP facilities. The findings suggest that working for God matters.Payment Systems&Infrastructure,Public Health Promotion,Labor Policies,Health Systems Development&Reform,Health Monitoring&Evaluation,Health Monitoring&Evaluation,Housing&Human Habitats,Health Systems Development&Reform,International Terrorism&Counterterrorism,Health Economics&Finance

Shifting tax burdens through exemptions and evasion - an empirical investigation of Uganda

The authors look at how prevalent tax exemptions, and evasion are among businesses in Uganda, how they translate into actual tax burdens for firms of different sizes, and how the tax administration attempts to ensure compliance. Despite tax reforms undertaken in 1995-97 to increase the efficiency, and equity of the tax system, and its administration, exemptions, and evasion during this three-year period remained widespread, and the dispersion of the tax burden did not decrease. The analysis shows that tax evasion is more prevalent among smaller firms, that taxexemptions are more common among larger firms, and that medium-size firms tend to shoulder a disproportionate share of the total tax burden.Small Scale Enterprise,Public Sector Economics&Finance,Tax Policy and Administration,Small and Medium Size Enterprises,Microfinance,Public Sector Economics&Finance,Tax Policy and Administration,National Governance,Taxation&Subsidies,Small Scale Enterprise

Working for God? Evidence form a Change in Financing of not-for-profit Health Care Providers in Uganda

What motivates religious not-for-profit health care providers? This paper uses a change in financing of not-for-profit health care providers in Uganda to test two theories of organizational behavior. We show that financial aid leads to more laboratory testing, lower user charges, and increased utilization. These findings are consistent with the view that religious not-for-profit providers are intrinsically motivated to serve (poor) people and that these preferences matter quantitatively.not-for-profit organizations; health care provision; organizational behavior; Uganda

Confronting competition - investment response and constraints in Uganda

Investment rates in Uganda are similar to others in Africa, - averaging slightly more than ten percent annually, with a median value of just under one percent. But the country's profit rates are considerably lower. These results are consistent with the view that Ugandan firms display more confidence in the economy than their counterparts in other African countries. Thus, for given profit rates, Ugandan firms invest more. At the same time, increased competition (because of economic liberalization) has exerted pressure on firms to cut costs. Many of those costs are not under the firms'control, however, so their profits have suffered. Using firm-level data, the authors identify and quantify a number of cost factors, including those associated with transport, corruption, and utility services. Several factors - including crime, erratic infrastructure services, and arbitrary tax administration - not only increase firms'operating costs, but affect their perceptions of the risks of investing in (partly) irreversible capital. The empirical analysis suggests that firms - especially small firms - are liquidity-constrained in the sense that they invest only when sufficient internal funds are available. But given the firms'profit-capital ratio, it is hard to argue that the liquidity constraint is binding in most cases, even though the cost of capital is perceived as a problem.Economic Theory&Research,Labor Policies,International Terrorism&Counterterrorism,Decentralization,Payment Systems&Infrastructure,Environmental Economics&Policies,International Terrorism&Counterterrorism,Trade and Regional Integration,ICT Policy and Strategies,Economic Theory&Research

Survey techniques to measure and explain corruption

Reinikka and Svensson demonstrate that, with appropriate survey methods and interview techniques, it is possible to collect quantitative micro-level data on corruption. Public expenditure tracking surveys, service provider surveys, and enterprise surveys are highlighted with several applications. While often broader in scope, these surveys permit measurement of corruption at the level of individual agents, such as schools, health clinics, or firms. They also permit the study of mechanisms responsible for corruption, including leakage of funds and bribery, as data on corruption can be combined with other data collected in these surveys.ICT Policy and Strategies,Public Health Promotion,Health Monitoring&Evaluation,Decentralization,Corruption&Anitcorruption Law,Health Monitoring&Evaluation,Governance Indicators,National Governance,TF054599-PHRD-KYRGYZ REPUBLIC: WATER MANAGEMENT IMPROVEMENT PROJECT,ICT Policy and Strategies

Do budgets really matter? - evidence from public spending on education and health in Uganda

The authors demonstrate that budget allocations alone can be misleading in explaining outcomes and making policy decisions, when institutions are weak. They diagnose the problem, using empirical evidence from primary education and health care in Uganda, but arguing that a similar problem exists in many countries. Adequate public accounts are not available so they carried out a field survey of schools and clinics to collect data on spending. Problems with the flow of public funds have to do largely with governance and a lack of accountability. Among problems with the service delivery system: Primary enrollments increased 60 percent in 1991-95, but official figures indicate enrollments were stagnant. Such a stunning discrepancy indicates that official data cannot always be trusted. The government's share of funding increased over time, but public primary education was still funded largely by parents, who contributed, on average, more than 70 percent of total spending on schools in 1991 (median 40 percent) and 60 percent in 1995 (median 20 percent). Parents'contribution continued to increase despite higher public spending. Less than 30 percent of funding intended for nonsalary public spending actually reached the schools in 1991-95; district authorities kept and used most of the capitation grant meant for schools. (An increase in enrollments which was not taken into account when the total amount of the grant was calculated is responsible for the remaining discrepancy). Similarly, at best, schools were allowed to keep only a third of mandatory tuition fees from parents; the rest went to district education offices. By and large, salary payments did reach the schools, so at least the wage part of the increase in budget allocations filtered down through the system. The only systematic way of misappropriating salary funds were"ghosts"on the payroll. Close to 20 percent of all teachers on the payroll were removed as ghosts in 1993. The behavior of public service facilities in the two sectors varies considerably. Schools, for example, keep systematic records of financial flows and enrollments (perhaps because parents provide most of the funding and are likely to insist on accountability). The health care sector does not keep good records.Since release of the survey results, there have been changes. Among them, monthly transfers of public funds are reported in the media; school-based procurement has replaced the central supply of construction and other materials; and an effort has been made to institute basic public accounting systems in the public sector, including districts.Health Monitoring&Evaluation,Public Health Promotion,Primary Education,Teaching and Learning,Public Sector Economics&Finance,Teaching and Learning,Health Monitoring&Evaluation,National Governance,Primary Education,Public Sector Economics&Finance

Lessons from Uganda on strategies to fight poverty

Countries receiving debt relief under the Heavily Indebted Poor Countries initiative will be among the first to benefit from the new World Bank -- International Monetary Fund approach to strengthening the impact on poverty of concessional assistance in low-income countries. The new approach features a more inclusive and participatory process for helping recipient countries develop poverty reduction strategies. From these strategies, joint Poverty Reduction Strategy Papers (PRSPs) will bring together the country's own priorities and Bank-Fund assistance to the country. In Uganda, such a strategy has existed for several years. Uganda was one of the first low-income countries to prepare a comprehensive national strategy for poverty reduction using a participatory approach. Indeed, its experience contributed substantially to the design of the PRSPs. Uganda's top leadership is heavily committed to poverty reduction. Formulation of Uganda's Poverty Eradication Action Plan (PEAP) in 1996-97 was the executive branch's effort to make that commitment and vision operational.The authors draw lessons from the drafting of Uganda's PEAP. First, the plan made extensive use of existing data and research about Uganda to refocus a range of public policies and interventions relevant to poverty reduction. Second, the government's approach was highly participatory, with central and local governments, the donor community, nongovernmental organizations and civil society, and academics invited to contribute. Third, the government was quick to translate the plan into its budget and medium-term spending framework. Public expenditures on basic services were significantly increased after adoption of the PEAP in 1997. The authors discuss the general characteristics of a poverty reduction action plan, drawing on Uganda's experience; discuss what is known about poverty in Uganda and identify shortcomings in the data; examine the macroeconomic and fiscal policies that were considered most important to poverty reduction during the participatory process; discuss the delivery of public services, especially those that directly affect the poor; and highlight problems associated with land issues, including problems with access to credit and financial services and with the security of productive assets.Health Monitoring&Evaluation,Environmental Economics&Policies,Public Health Promotion,Health Economics&Finance,Services&Transfers to Poor,Poverty Assessment,Environmental Economics&Policies,Achieving Shared Growth,Governance Indicators,Health Economics&Finance

Explaining Leakage of Public Funds

Public services, Education, Private gain, Leakage

How inadequate provision of public infrastructure and services affects private investment

Lack of private investment is a serious policy problem in many developing countries, especially in Africa. Despite recent structural reform and stabilization, the investment response to date has been mixed, even among the strongest reformers. The role of poor infrastructure and deficient public services has received little attention in the economic literature, where the effect of public spending and investment on growth is shown to be at best ambiguous. The authors use unique microeconomic evidence to show the effects of poor infrastructure services on private investment in Uganda. They find that poor public capital, proxied by an unreliable and inadequate power supply, significantly reduces productive private investment. Firms ca substitute for inadequate provision of public capital by investing in it themselves. This comes at a cost, however: the installation of less productive capital. These results have clear policy implications. Although macroeconomic reforms and stabilization are necessary conditions for sustained growth and private investment, without an accompanying improvement in the public sector's performance, the private supply response to macroeconomic policy reform is likely to remain limited.Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,International Terrorism&Counterterrorism,ICT Policy and Strategies

The power of information : evidence from a newspaper campaign to reduce capture

The authors exploit an unusual policy experiment to evaluate the effects of increased public access to information as a tool to reduce capture and corruption of public funds. In the late 1990s, the Ugandan government initiated a newspaper campaign to boost schools'and parents'ability to monitor local officials'handling of a large school-grant program. The results were striking: capture was reduced from 80 percent in 1995 to less than 20 percent in 2001. The authors use distance to the nearest newspaper outlet as an instrument for exposure to the campaign. Proximity to a newspaper outlet is positively correlated with the head teachers'knowledge about rules governing the grant program and the timing of releases of funds from the center, but uncorrelated with test scores of general ability. A strong (reduced-form) relationship exists between proximity to a newspaper outlet and reduction in capture of school funds since the newspaper campaign started. This pattern contrasts sharply with the outcomes in the five-year period prior to the campaign. Instrumenting for head teachers'knowledge about the grant program, the authors find that public access to information is a powerful deterrent to capture at the local level.Public Health Promotion,Teaching and Learning,ICT Policy and Strategies,Health Monitoring&Evaluation,Primary Education,Health Monitoring&Evaluation,Teaching and Learning,TF054599-PHRD-KYRGYZ REPUBLIC: WATER MANAGEMENT IMPROVEMENT PROJECT,Primary Education,ICT Policy and Strategies