One of the many open questions discussed in the aid community is whether aid is more effective if offered free of charge or if the poor have to pay for it. In White Men’s Burden. Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, development expert William Easterly describes how Mosquito nets often don’t make it to the poor: distributed by aid agencies for free (for example by the UN), they end up on the black market or get used for purposes other than intended – as fishing nets or wedding veils. According to a study of free mosquito distribution in Zambia, 40% of the nets were not used for their intended purpose.
On the other hand, the non-profit organisation Population Service International in Malawi sells insecticide treated bed-nets for 50 cents to pregnant mothers though birth clinics. The nurses selling the nets are allowed to keep 9 cents themselves and thus have an incentive to always have them in stock. The programme itself is financed by the profits from regular net sales (5 US$ a piece) to more wealthy Malawians. It was a huge success, resulting in 55% of pregnant women and children under 5 using bed-nets (up from 8% in 2000).
The rationale of the cost-sharing proponents is that people paying for goods and services will give aid institutions valuable feedback, whereas when delivered for free, the poor don’t have any power to complain or reject the goods offered to them.
“Charging the poor modest fees for health care is a way to increase accountability for delivering health services. If the villagers don’t get a good service after they have sacrificed to pay for it, they loudly complain”, says the founder of Gonoshasthaya Kendra (People’s Health Center), a Bangladeshi NGO charging a small fee in return for their support of pregnant women.
A new study by the Brookings Institute Free Distribution or cost sharing? Evidence from a randomized Malaria Prevention Experiment comes to a different conclusion.
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