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Designing incentives for rural health



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Journal of Development Economics 69 2002 297 303 www elsevier com locate econbase Designing incentives for rural health care providers in developing countries Jeffrey Hammer a William Jack b 1 a Development Economics Research Group The World Bank 1818 H St NW Washington DC 20433 USA b Department of Economics Georgetown University Washington DC 20057 USA Received 1 March 2001 accepted 1 November 2001 Abstract In many developing country settings and particularly in rural areas the implementation of anything more than very rudimentary contracts for medical care providers including public employees is virtually impossible In this paper we examine the kinds of policy levers that governments might conceivably have available to induce physicians to serve in rural areas Using simple models of screening and spatial competition we investigate how the government can sort between physicians with low and high opportunity costs of relocation and how the quality of existing providers e g traditional healers might affect the government s training policies D 2002 Elsevier Science B V All rights reserved JEL classification H42 I11 O18 Keywords Physician incentives Rural health care 1 Introduction Since 1977 the international health community has put a great deal of emphasis on ensuring universal access to basic primary care as a high priority for public action While the rationale for this emphasis is questionable 2 we take this goal as given In practice attempts at universal provision have often been disappointing Reliance on the private sector to put trained professionals in such areas is not warranted as demand for the services Corresponding author Tel 1 202 458 1410 E mail addresses jhammer worldbank org J Hammer wgj georgetown edu W Jack 1 Tel 1 202 687 0773 2 See Filmer et al 2000 for a critique of this approach to health care policy 0304 3878 02 see front matter D 2002 Elsevier Science B V All rights reserved PII S 0 3 0 4 3 8 7 8 0 2 0 0 0 6 3 9 298 J Hammer W Jack Journal of



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