Decentralizing the Provision of Health Services : An Incomplete Contracts Approach
The author studies the allocation-between a central government and a local authority--of responsibility for planning, financing, and operations for the delivery of health services, in the context of an incomplete contracts model. In this model,...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/07/443601/decentralizing-provision-health-services-incomplete-contracts-approach http://hdl.handle.net/10986/19827 |
| id |
okr-10986-19827 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-198272021-04-23T14:03:46Z Decentralizing the Provision of Health Services : An Incomplete Contracts Approach Jack, William AGENCY PROBLEMS ALLOCATIVE EFFICIENCY ASSETS ASYMMETRIC INFORMATION AUTHORITY AUTONOMY BUREAUCRAT CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CONSUMERS COURT SYSTEM DECENTRALIZATION DECISION MAKING DECISION MAKING AUTHORITY DEMOCRACY EQUILIBRIUM EXPENDITURE EXTERNALITIES FEDERALISM FINANCIAL INTERMEDIATION FINANCIAL STRUCTURE FISCAL FISCAL DECENTRALIZATION FISCAL FEDERALISM FORMAL ANALYSIS FORMAL CONTRACTS GDP HEALTH SERVICES HUMAN CAPITAL INCENTIVE CONTRACTS INCOME INFORMATION ASYMMETRIES INTERGOVERNMENTAL RELATIONS LEVELS OF GOVERNMENT LIVING CONDITIONS LOCAL AUTHORITIES LOCAL AUTHORITY LOCAL GOVERNMENT LOCAL GOVERNMENTS MARGINAL PRODUCTIVITY MIDDLE INCOME COUNTRIES OPERATING COSTS OWNERSHIP STRUCTURE POLITICAL ECONOMY POLITICIANS PRIVATE GOODS PRIVATIZATION PRODUCTION EFFICIENCY PUBLIC ADMINISTRATION PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR PUBLIC SERVICES PUBLIC SPENDING RESOURCE ALLOCATIONS REVENUE SHARING SAVINGS SOCIAL SECTORS SOCIAL SERVICES SOCIAL WELFARE TAX ASSIGNMENT TAX AUTHORITY TAX PAYMENTS TERMS OF TRADE TOTAL COSTS TRADE FLOWS TRADE POLICIES TRANSPORT VALUATION The author studies the allocation-between a central government and a local authority--of responsibility for planning, financing, and operations for the delivery of health services, in the context of an incomplete contracts model. In this model, inputs are required of both the central government and local authorities but they are unable to write down, and commit to, a complete and binding contract describing the actions both should take. The model is meant to capture the tradeoff between central and local authority in decisions about both financing and the provision of services. Each party provides a specific input--for example, the central government establishes a drug procurement system while the local authority designs and implements an incentive scheme to get doctors to carry out their responsibilities appropriately. The responsibility for delivery of services is identified with the ownership of essential infrastructure, such as the clinic or hospital. The author finds that to maximize the joint surplus of the two public bodies: Ownership of the facility should be given to the party that most values the well-being of local residents. (This way, if ex post bargaining breaks down, each still enjoys some benefits from the other's actions.) Financing authority and responsibility for delivering services should be negatively correlated. Generally it is optimal to allocate tax authority to the party that values the residents' well-being less--in other words, separate spending responsibility (ownership) from financing authority. A heavier financing burden (access to a small and inefficient tax base) has the same incentive effect as asset ownership: It increases the return to effort. If transferring ownership of the physical asset is costly (because the party that builds the asset has an inherent advantage in operating it-that is, there is some human capital embodiment), it may be optimal for the party with the higher construction costs to have planning authority. Somewhat paradoxically, the greater the costs of transferring assets from one party to the other, the more likely that ownership of the facilities and their provision should be separated. 2014-08-28T18:10:30Z 2014-08-28T18:10:30Z 2000-07 http://documents.worldbank.org/curated/en/2000/07/443601/decentralizing-provision-health-services-incomplete-contracts-approach http://hdl.handle.net/10986/19827 English en_US Policy Research Working Paper;No. 2395 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGENCY PROBLEMS ALLOCATIVE EFFICIENCY ASSETS ASYMMETRIC INFORMATION AUTHORITY AUTONOMY BUREAUCRAT CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CONSUMERS COURT SYSTEM DECENTRALIZATION DECISION MAKING DECISION MAKING AUTHORITY DEMOCRACY EQUILIBRIUM EXPENDITURE EXTERNALITIES FEDERALISM FINANCIAL INTERMEDIATION FINANCIAL STRUCTURE FISCAL FISCAL DECENTRALIZATION FISCAL FEDERALISM FORMAL ANALYSIS FORMAL CONTRACTS GDP HEALTH SERVICES HUMAN CAPITAL INCENTIVE CONTRACTS INCOME INFORMATION ASYMMETRIES INTERGOVERNMENTAL RELATIONS LEVELS OF GOVERNMENT LIVING CONDITIONS LOCAL AUTHORITIES LOCAL AUTHORITY LOCAL GOVERNMENT LOCAL GOVERNMENTS MARGINAL PRODUCTIVITY MIDDLE INCOME COUNTRIES OPERATING COSTS OWNERSHIP STRUCTURE POLITICAL ECONOMY POLITICIANS PRIVATE GOODS PRIVATIZATION PRODUCTION EFFICIENCY PUBLIC ADMINISTRATION PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR PUBLIC SERVICES PUBLIC SPENDING RESOURCE ALLOCATIONS REVENUE SHARING SAVINGS SOCIAL SECTORS SOCIAL SERVICES SOCIAL WELFARE TAX ASSIGNMENT TAX AUTHORITY TAX PAYMENTS TERMS OF TRADE TOTAL COSTS TRADE FLOWS TRADE POLICIES TRANSPORT VALUATION |
| spellingShingle |
AGENCY PROBLEMS ALLOCATIVE EFFICIENCY ASSETS ASYMMETRIC INFORMATION AUTHORITY AUTONOMY BUREAUCRAT CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CONSUMERS COURT SYSTEM DECENTRALIZATION DECISION MAKING DECISION MAKING AUTHORITY DEMOCRACY EQUILIBRIUM EXPENDITURE EXTERNALITIES FEDERALISM FINANCIAL INTERMEDIATION FINANCIAL STRUCTURE FISCAL FISCAL DECENTRALIZATION FISCAL FEDERALISM FORMAL ANALYSIS FORMAL CONTRACTS GDP HEALTH SERVICES HUMAN CAPITAL INCENTIVE CONTRACTS INCOME INFORMATION ASYMMETRIES INTERGOVERNMENTAL RELATIONS LEVELS OF GOVERNMENT LIVING CONDITIONS LOCAL AUTHORITIES LOCAL AUTHORITY LOCAL GOVERNMENT LOCAL GOVERNMENTS MARGINAL PRODUCTIVITY MIDDLE INCOME COUNTRIES OPERATING COSTS OWNERSHIP STRUCTURE POLITICAL ECONOMY POLITICIANS PRIVATE GOODS PRIVATIZATION PRODUCTION EFFICIENCY PUBLIC ADMINISTRATION PUBLIC FUNDS PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR PUBLIC SERVICES PUBLIC SPENDING RESOURCE ALLOCATIONS REVENUE SHARING SAVINGS SOCIAL SECTORS SOCIAL SERVICES SOCIAL WELFARE TAX ASSIGNMENT TAX AUTHORITY TAX PAYMENTS TERMS OF TRADE TOTAL COSTS TRADE FLOWS TRADE POLICIES TRANSPORT VALUATION Jack, William Decentralizing the Provision of Health Services : An Incomplete Contracts Approach |
| relation |
Policy Research Working Paper;No. 2395 |
| description |
The author studies the
allocation-between a central government and a local
authority--of responsibility for planning, financing, and
operations for the delivery of health services, in the
context of an incomplete contracts model. In this model,
inputs are required of both the central government and local
authorities but they are unable to write down, and commit
to, a complete and binding contract describing the actions
both should take. The model is meant to capture the tradeoff
between central and local authority in decisions about both
financing and the provision of services. Each party provides
a specific input--for example, the central government
establishes a drug procurement system while the local
authority designs and implements an incentive scheme to get
doctors to carry out their responsibilities appropriately.
The responsibility for delivery of services is identified
with the ownership of essential infrastructure, such as the
clinic or hospital. The author finds that to maximize the
joint surplus of the two public bodies: Ownership of the
facility should be given to the party that most values the
well-being of local residents. (This way, if ex post
bargaining breaks down, each still enjoys some benefits from
the other's actions.) Financing authority and
responsibility for delivering services should be negatively
correlated. Generally it is optimal to allocate tax
authority to the party that values the residents'
well-being less--in other words, separate spending
responsibility (ownership) from financing authority. A
heavier financing burden (access to a small and inefficient
tax base) has the same incentive effect as asset ownership:
It increases the return to effort. If transferring ownership
of the physical asset is costly (because the party that
builds the asset has an inherent advantage in operating
it-that is, there is some human capital embodiment), it may
be optimal for the party with the higher construction costs
to have planning authority. Somewhat paradoxically, the
greater the costs of transferring assets from one party to
the other, the more likely that ownership of the facilities
and their provision should be separated. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Jack, William |
| author_facet |
Jack, William |
| author_sort |
Jack, William |
| title |
Decentralizing the Provision of Health Services : An Incomplete Contracts Approach |
| title_short |
Decentralizing the Provision of Health Services : An Incomplete Contracts Approach |
| title_full |
Decentralizing the Provision of Health Services : An Incomplete Contracts Approach |
| title_fullStr |
Decentralizing the Provision of Health Services : An Incomplete Contracts Approach |
| title_full_unstemmed |
Decentralizing the Provision of Health Services : An Incomplete Contracts Approach |
| title_sort |
decentralizing the provision of health services : an incomplete contracts approach |
| publisher |
World Bank Group, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/07/443601/decentralizing-provision-health-services-incomplete-contracts-approach http://hdl.handle.net/10986/19827 |
| _version_ |
1764441505588576256 |