Economists believe that incentives matter and that they can be used for changing people’s behaviors. Incentives are used for encouraging school attendance and performance or for increasing the coverage and quality of health care delivery. But a recurrent question is what happens once the incentives are discontinued? Are the incentives’ effects going to be sustained even after their payment is stopped because individuals would have been nudged towards a different behavior? Or are those effects going to die down and disappear once incentives are removed?
These past weeks I’ve visited several southern African nations to assist on-going evaluations of health sector pay-for-performance reforms. It’s been a whirlwind of government meetings, field trips, and periods of data crunching. We’ve made good progress and also discovered roadblocks – in other words business as usual in this line of work. One qualitative data point has stayed with me throughout these weeks, the paraphrased words of one clinic worker: “I like this new program because it makes me feel that the people in charge of the system care about us.”
So what makes people do socially oriented tasks better? An interesting new paper by Nava Ashraf, Oriana Bandiera, and Kelsey Jack shows that money doesn’t matter and recognition makes a big difference.