Saturday, August 22, 2009

Why millions of the world’s poor still choose to go private

Imagine that your daily earnings were less than the price of this newspaper. Would you consider buying private education and private healthcare?

Before you make up your mind, here are a few considerations: government healthcare and primary education are free; the private-sector doctors are ignorant quacks and the teachers are poorly qualified; the private schools are cramped and often illegal. It doesn’t sound like a tough decision. Yet millions of very poor people around the world are taking the private-sector option. And, when you look a little closer at the choice, it’s not so hard to see why.

Take the doctors of Delhi, who were studied carefully by two World Bank researchers, Jishnu Das and Jeffrey Hammer. These doctors are busy people – the average household visits a doctor every two weeks, and the poor are particularly likely to visit. And, surprisingly, three-quarters of those visits are to private practitioners – despite the fact that public-sector doctors are better qualified. Why?

Das and Hammer tested the competence and the practices of a sample of doctors by sending observers to sit in their surgeries. They discovered that “under-qualified private-sector doctors, although they know less, provide better care on average than their better-qualified counterparts in the public sector”. This is not particularly mysterious, because private-sector doctors don’t get paid unless they can convince their patients that they’re doing a decent job. Public-sector doctors draw salaries and, if they are held accountable at all, it is through indirect channels.

There is a similar story to be told about education...

The lesson here is that a little accountability goes a long way – and fee-paying customers are in an excellent position to hold schools and clinics to account. By all means let’s work out how to make government facilities more accountable, in order to provide better education for the world’s poor. But we should also investigate how low-cost private services could be nurtured.

Read the entire article here