Working Paper: CEPR ID: DP4214
Authors: Ritva Reinikka; Jakob Svensson
Abstract: This Paper exploits a unique micro-level data set on primary health care facilities in Uganda to address the question: What motivates religious not-for-profit (RNFP) health care providers? We use two approaches to identify whether an altruistic (religious) effect exists in the data. First, exploiting the cross-section variation, we show that RNFP facilities hire qualified medical staff below the market wage; are more likely to provide pro-poor 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. RNFP 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 RNFP are driven (partly) by altruistic (religious) concerns and that these preferences matter quantitatively. Second, we exploit a near natural experiment in which the government initiated a program of financial aid for the RNFP sector, and show that financial aid leads to more laboratory testing of suspected malaria and intestinal worm cases, and hence higher quality of service, and to lower user charges. These findings suggest that working for God matters.
Keywords: Altruism; Financial Aid; Natural Experiment; Religious Not-for-Profit Health Care Providers
JEL Codes: H39; I11; L31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| RNFP facilities hire qualified medical staff below the market wage (J39) | RNFP facilities are more likely to provide pro-poor services (R38) |
| RNFP facilities hire qualified medical staff below the market wage (J39) | RNFP facilities charge lower prices (R38) |
| Financial aid from the government (I22) | Increased laboratory testing for suspected malaria and intestinal worms (C91) |
| Increased laboratory testing for suspected malaria and intestinal worms (C91) | Higher quality service in RNFP facilities (I11) |
| Increased laboratory testing for suspected malaria and intestinal worms (C91) | Lower user charges in RNFP facilities (H49) |
| Financial aid from the government (I22) | Higher quality service in RNFP facilities (I11) |
| Financial aid from the government (I22) | Lower user charges in RNFP facilities (H49) |