Work

Making Bricks from Straw: Resources and Productivity in Health Care

Year: 2026

Type: article

Abstract: Why do health facilities in developing countries do so poorly? This paper examines the role of financial constraints. I describe an experiment in which we surprised health workers in randomly selected public health clinics in Nigeria with a N600,000 grant paid out in installments over one year. Its administration was left entirely to health workers. I show that the award led to large productivity gains. Using expenditure data combined with novel textual data I provide an explanation for these effects. I show that the award increased investments in physical and human capital, led to lower prices for patients and inspired health workers to do better.

Source: American Economic Review

DOI: 10.1257/aer.20241459

Author: Edward N. Okeke

Institution: RAND School of Public Policy

Language: English

Topic: Healthcare Systems and Reforms

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, No poverty, Good health and well-being

Open Access status: green

Funder: National Institutes of Health