We like to think of doctors and teachers as knights in shining armor, focused purely on our well-being, without regard for profit or other personal interests. The reality, we know, is more complicated. Doctors, teachers, and even World Bankers, are motivated by a range of internal and external factors, from altruism through to self-interest.
The issue of provider motivation and how to incentivize it is a hot topic in development. Julian Le Grand (pictured below), the Richard Titmuss Professor of Social Policy at the London School of Economics defines four models of public service delivery that he believes account for the motivation of service providers in fields such as health and education. These models recognize motivation as an important piece of the puzzle for improving service delivery. Public policies supported by the Bank and other donors are increasingly focused on strengthening incentives in a way that changes provider behavior to ensure the best service delivery, and Le Grand’s approach may help us better understand our options.
According to Le Grand, who explained his views at an internal forum in late February for the Bank’s Human Development division, services can be organized around trust, mistrust, voice and choice. Under the trust, approach, those who deliver public services are thought to be knights who can be trusted to deliver a high-quality service. In contrast, the mistrust model considers providers to be the opposite of knights – knaves, or rogues, who need close monitoring through top-down setting and monitoring of targets. Le Grand, who was former British Prime Minister Tony Blair’s health advisor, said the UK government used to run the National Health Service according to the “mistrust” model, by setting sector targets that health-care providers were expected to meet. At regular ‘stock-take’ sessions, nervous Department heads had to explain why the targets – such as waiting times for surgery – were not being met. This approach was affectionately known as “targets and terror.”
Service delivery can also incorporate voice, through arrangements for users of public services to communicate their views directly to service providers, for example through formal complaints mechanisms, or parent-teacher conferences. Or finally through the ‘invisible hand’ of choice and competition, whereby users choose the service they want from those offered by competing providers.
Each of these models has promising features and drawbacks – but “they are all bad,” Le Grand joked. Trust models empower providers but have weak accountability for results. Mistrust models can work over the short term, but may be vulnerable to ‘gaming’ -- think of teachers who ‘teach to the test’, or may encounter resistance from professionals who resist being second-guessed. Voice approaches put users of services into the driver’s seat, by giving them authority to hold providers accountable, but may be regressive, and risk creating adversarial relationships between providers and users.
Choice and competition models are appealing and may garner public support. Contrary to conventional wisdom, Le Grand cited surveys that suggest that the poor are more likely to want choice of services than the middle class. This point is also poignantly illustrated in the documentary about US education reform, “Waiting for Superman,” which tracks low income families desperate to get their children out of failing schools. However, as the film illustrates, in the US and developing countries alike the supply of services, especially in rural and other underserved areas, may be limited. People simply may not have a choice. And competition may not work if failure is not an option–in other words if poorly performing clinics or schools cannot be shut down.
Where does this leave us? Le Grand’s talk and the discussion after underscored the complexity of managing motivation and incentives. Knights can be turned into knaves through badly designed incentive systems, and services won’t function if the objectives of providers and users are not aligned.
There is much to be gained from analyzing how motivation affects service delivery. The severe failures of service delivery in many of our client countries–including absent teachers, health clinics lacking essential drugs, and poor quality health care–can have devastating effects on people’s lives and cannot be solved by money alone. As most people are part knave and part knight, development workers included, We at the World Bank need to consider devising programs to support the knightly side to improve public services.
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