Bribery in Health Care in Uganda
In this article the author examines the relationship between bribery and income in public and private health care systems in Uganda and whether people who bribe more receive better quality healthcare. In theory, if health care providers possess some degree of monopoly power they should price discriminate richer clients in order to extract larger bribes. This article shows that public hospitals in Uganda use price discrimination on bribes based on the client's income. On the other hand, private hospitals use bribes as a fee to improve the quality of healthcare provided.
The results point to different effects in public health care and private health care. Public health care institutions show evidence of price discrimination - doubling household expenditures, taken as a proxy for income, increases the probability of bribing by 1.2% on a baseline of 17%. Bribe amounts increase by 0.37% for a one percent increase in a household’s expenditures. Therefore richer households pay more in absolute terms but less as a share of their total expenditures.
On the other hand, for private health facilities the probability of bribing is uncorrelated to a household’s expenditures, and the bribe amounts only increase by 0.15% for a 1% increase in expenditures, less than half the elasticity of public health institutions. Estimating the effects of bribing on healthcare quality is challenging due to the reverse causality between quality of healthcare and bribe payment. Patients unsatisfied with the service they receive are more likely to bribe in order to improve the service. Therefore, the results should be taken with caution but suggest that bribing raises quality in private facilities but not in public facilities.
To sum up, it seems that public hospitals use first-degree price discrimination to extract rents out of richer households, without improving the quality of the service, whereas bribes in the private sector are used as a payment to improve the quality of healthcare received and can be viewed as a fee-for-service.
Citation: J. Hunt, "Bribery in Health Care in Uganda", Journal of Health Economics, 29(5): 699 - 707, 2010