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Title: Working for God?

Author(s): Ritva Reinikka and Jakob Svensson

Publication Date: January 2004

Keyword(s): altruism, financial aid, natural experiment and religious not-for-profit health care providers

Programme Area(s): Public Economics

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.

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Bibliographic Reference

Reinikka, R and Svensson, J. 2004. 'Working for God?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4214