Full text PDF - International Policy Network

114 Fighting the Diseases of Poverty
Addressing some of the incentives behind informal payments
provide options for reform. Some alternative policies include: standardizing
quality and access (e.g., waiting time), allowing and promoting
alternative financing mechanisms through the private
sector (e.g., private insurance arrangements), and, within the public
sector, balancing the number of staff and resources so as to have
fewer positions with higher pay. As discussed elsewhere higher pay
will not necessarily address corruption by itself, but paying wages
that are appropriate to existing labor market conditions, prohibiting
side payments and holding providers accountable could together
encourage more transparent and fair transactions, and offer incentives
for better provider performance. Although it is expensive for
countries to raise wages in public health care services, a reform that
regularizes and improves pay has the potential to raise productivity.
Higher productivity, in turn, would make it possible to provide
the same amount of services or more, with fewer workers, thereby
offsetting some of the expected increase in the total wage bill. In
addition, greater transparency in all fiduciary functions would
improve fairness and bolster effectiveness.
In Venezuela, a study of public hospitals found that theft and
unjustified absences declined with greater accountability,
although the rate of approved absences rose, so reforms can be
effective but management objectives can sometimes be too
narrowly defined (Jaen and Paravinski, 2001). The issue should not
be absences per se but performance and both management and
accountability mechanism need to focus on these.
Having government contract out services can often improve performance
of publicly subsidized services, partly because holding
contractors accountable is far easier than doing so with public
workers. Often government has few incentives to offer public
servants given rigidity in most civil service rules, but retains
leverage over contractors. Nonetheless contracting out is far from a
panacea as it means developing regulatory capacity which varies
from the standard tasks of providers and managers who operate
points of service. Experience in Haiti (Eichler, Auzilia and Pollock,