In many developing countries, making informal payments to health care workers is common. Lewis (2000) estimates the frequency of informal payments in selected Asian and Central/Eastern European countries as:
- Armenia: 91%;
- Azerbaijan: 78%;
- Kyrgyz Republic: 75%
- Poland: 78%;
- Russia: 74%
- Vietnam: 81%;
Do these payments work? Would people be better off if these bribes were made illegal?
According to a 2013 article by Lindkvist looking at informal payments in Tanzania, the answers are likely ‘Yes’ and ‘No’.
We find that health workers who likely accept payments do not exert higher average effort. They do however have a higher variability in the effort they exert to different patients. These health workers are also less sensitive to the medical condition of the patient. A likely explanation for these findings is that health workers engage in rent seeking and lower baseline effort to induce patients to pay.
- Lindkvist, I. (2013), INFORMAL PAYMENTS AND HEALTH WORKER EFFORT: A QUANTITATIVE STUDY FROM TANZANIA. Health Econ., 22: 1250–1271. doi: 10.1002/hec.2881
- TING LIU and MONIC SUN. INFORMAL PAYMENTS IN DEVELOPING COUNTRIES’ PUBLIC HEALTH SECTORS. Paciﬁc Economic Review, 17: 4 (2012).