Institutional Determinants of Informal Payments for Health Services: An Exploratory Analysis across 117 Countries

Abstract

Healthcare accessibility and equity remain important issues, as corruption in the form of informal payments is still prevalent in many countries across the world. This study employs a panel data analysis over the 2006–2013 period to explore the role of different institutional factors in explaining the prevalence of informal payments. Covering 117 countries, our findings confirm the significant role of both formal and informal institutions. Good governance, a higher trust among individuals, and a higher commitment to tackling corruption are associated with diminishing informal payments. In addition, higher shares of private finance, such as out-of-pocket and domestic private health expenditure, are also correlated with a lower prevalence of informal payments. In policy terms, this displays how correcting institutional imperfections may be among the most efficient ways to tackle informal payments in healthcare.

Corruption and Ethics in Health Care

“…3,5 Moreover, the overall quality of the rule of law and the quality of governance have been shown to reduce the incidence of informal payments in health care and increase the willingness to report corrupt acts. 32 This is actually a logical relationship since the proper governance of the state allows its inhabitants to express a certain degree of trust in it, thereby reducing tax avoidance and evasion and reducing activity in the informal economy and thereby enriching the state budget from which a good and affordable health sector can be financed. The need to increase transparency and accountability of key actors is often mentioned as a solution.…”

Informal payments by patients, institutional trust and institutional asymmetry

“…Indeed, recent research emphasizes the relationship between informal payments, corruption, and institutional trust or the trust in public authorities (Horodnic et al, 2021;Incaltarau et al, 2021;Gozgor, 2022).…”

“…As such, the voids and weaknesses of the formal institutions include examples of excessive bureaucracy and many laws and regulations ( Polese, 2014 ). Determinants related to resource misallocation and inefficiencies include: lack of transparency ( Stepurko et al, 2015 ; Horodnic et al, 2021 ), the inefficiency of the health management system ( Lewis, 2007 ; Stepurko et al, 2015 ; Burnett et al, 2016 ), the lack of financial resources ( Williams and Horodnic, 2018a ), a poor health system performance ( Tambor et al, 2013 ; Horodnic et al, 2018b , 2021 ), or the influence of poor economic performance (i.e., public expenditure on health) and governance performance ( Tambor et al, 2013 ; Stepurko et al, 2015 ; Incaltarau et al, 2021 ). Similarly, other determinates of informal payments are related to formal institutions powerlessness exemplified by a low level of penalties imposed on citizens who initiate unofficial payments ( Lewis, 2007 ) and a diminished activity of monitoring the health system ( Lewis, 2007 ).…”

“…Meanwhile, studies on the informal institutional environment have revealed the influence of personal factors such as the patients’ beliefs, attitudes, and feelings related to what represents an acceptable behavior or a different perception of the patient-doctor relationship ( Horodnic, 2021 ; Incaltarau et al, 2021 ). These factors are found to be more relevant at country level ( Balabanova and McKee, 2002 ; Gaal and McKee, 2004 ; Liaropoulos et al, 2008 ; Baji et al, 2012 ; Riklikiene et al, 2014 ; Williams and Franic, 2016 ).…”

“…Similarly, a recent study reveals the association between the prevalence of the informal payments by patients and the lack of alignment between formal and informal institutions (also known in the literature as institutional asymmetry) as underlying the disparities between countries ( Horodnic and Williams, 2018 ). Indeed, recent research emphasizes the relationship between informal payments, corruption, and institutional trust or the trust in public authorities ( Horodnic et al, 2021 ; Incaltarau et al, 2021 ; Gozgor, 2022 ).…”