Health systems worldwide fail to produce optimal health outcomes, and successive
reforms have sought to make them more efficient, more equitable and more
responsive. The overarching objective of this thesis is to explore how to motivate
healthcare providers in improving performance in service delivery in low income
countries. The thesis explores whether financial incentives for healthcare providers
raise productivity and how they may affect equity in utilization of healthcare
services and responsiveness to patients’ needs. The thesis argues that, as
performance-based financing (PBF) focuses on supply side barriers, it may lead to
efficiency gains rather than equity improvements. It uses data from a randomized
controlled impact evaluation in Rwanda to generate robust evidence on
performance-based financing and address a gap in the knowledge on its unintended
consequences. Statistical methods are used to analyze four aspects: the impact on
health workforce productivity; the impact on health workforce responsiveness; the
impact on equity in utilization of basic health services; and, the impact on spatial
disparities in the utilization of health services. Findings indicate that performancebased
financing has a positive impact on efficiency: it raises health workforce
productivity through higher workload and lower absenteeism; and, it encourages
healthcare providers to be more responsive which positively impacts the quality of
care perceived by patients. Findings also indicate that the impact on equity is
uncertain as PBF can deter equity in access for the poorest in the absence of a
compensating mechanism; however, PBF is a powerful reform catalyzer and can
reduce inequalities between regions and households when combined with
appropriate reforms that control for its potential perverse effects. This thesis
advocates that strategies aiming to raise healthcare providers’ motivation should be
used to raise performance in service delivery in low-income countries with
particular attention to their effect on end users.