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When Financial Incentives Backfire


Title: When financial incentives backfire: Evidence from a community health worker experiment in Uganda

Abstract: There is growing support for an entrepreneurial community health worker (CHW) model, but the benefits of such a design are unclear. We randomly assigned CHWs in Uganda to sell treatment for child diarrhea door-to-door and retain the profits or to deliver treatment to homes for free. We find that, despite stronger financial incentives, the entrepreneurial model led to substantially less effort (fewer household visits) than the free delivery model. Qualitative evidence suggests that selling had a social penalty whereas free distribution was socially rewarding. Our results call into question the notion that an entrepreneurial model necessarily increases CHW effort relative to free distribution.

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