Poverty, Bureaucratic Behaviour and Health Policy

Abstract

This paper examines the impact of a self-interested bureaucracy on health care coverage in a poor country such as Cote d'Ivoire. Even when information about cost of care is available to all parties, the paper shows that only a fraction of the sick population receives adequate treatment for recovery because of extreme poverty. When there is an agency problem regarding the cost of treatment between a government and foreign pharmaceutical laboratories, the fraction of sick patients who receive medical care is reduced. If the government uses an agent (bureaucracy) to solicit information regarding the true cost of treatment to ameliorate the agency problem but the bureaucracy can be bribed by foreign pharmaceutical laboratories or the health care provider to hide the true cost of care, the effect of designing a collusion-free contract is to further reduce the proportion of sick patients who receive medical care. This means that more people die every day in Africa as a result of bureaucratic behaviour. Copyright 2004, Oxford University Press.