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Submitted by Lant Pritchett on
This blog post does a very good job at describing the very poor condition of publicly produced Indian health services. The note also does a good job at identifying the issue of provision versus production. But then asserts, with no particularly justification, that the public sectors (the many states of India) have a superior technology for producing health care services in rural areas. The main issue in producing health care services is getting suitably qualified and appropriately motivated human beings into place. There are in general three ways of getting human beings to do things: extrinsic motivation, compulsion, or intrinsic motivation. Everyone agrees the private sector is better at extrinsic motivation, so that cannot be the author's argument. The author presumably isn't arguing for compulsion (which in fact the public sector does have a comparative advantage in). So the argument must be that the public sector has a comparative advantage over the private sector in generating intrinsic motivation of health care providers: in creating an organizational structure in which these agents will be motivated by the mission and mandate of the organization and, in spite of not having access to higher powered extrinsic incentives, this organization be able to motivate agents to do things that a private (neither private nor not-for-profit) organization cannot. This is a common "intuition" and not always false. I think most people would choose a public sector army over a private sector army on the grounds that soldiering is the kind of activity for which intrinsic motivation is essential and high powered extrinsic incentives are difficult to generate in the business of soldiering. But lets think about a typical state of India and the doctors and nurses in the health services. The point that the author seems to miss is that the opportunity to create higher organizational intrinsic motivation has long since been lost. That is, all of the existing problems are directly traceable to the low morale and motivation of these services--and, by the way, in spite of more than adequate compensation of all but the highest levels. That is, we are not talking about some abstract theory of whether a "public sector" or "private sector" organization would, if built from scratch, be able to provide better services. The question is whether, the existing services in India could, with feasible reforms, turn themselves around from their existing state and produce greater commitment among its employees to a vision and mission of high quality health care in rural India that would generate intrinsic motivation that would lead to better services than the range of feasible alternatives in which the government financed non-state providers. I don't know personally, but have been told that the hardest military operation is to pull one unit out of the line of battle and replace it with a fresh unit during a retreat. This involves the fresh troops moving forward and crossing past the defeated and demoralized troops into a battle. The danger is that the defeating, despair and, shall we way, cynicism, of the existing troops infects the new troops and, rather than reinforcing a position both units turn and run and a retreat turns into a rout. The author seems to advocate the classic strategical blunder of pouring the last reinforcements (time, money, material, reform effect and political capital) into a ongoing rout when these will not be enough to carry the day. In fact the real opportunity in India is that, outside of perhaps TN and few other states, the rout has been so complete that nearly everyone perceives that the field is open to try genuinely new and innovative approaches (like RBSY) rather than throwing good money after bad. Precisely the reason to do so is that the best hope for creating organizations with powerful intrinsic motivation to address the health challenges of India in the current conditions in most states of India lies outside, not inside, the mainstream public sector ministries.