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Accountability in the Provision of Social Services cover

Accountability in the Provision of Social Services: A Framework for African Research

Producer: 
Paul Collier
Publication year: 
2007
Source of the information: 
The African Economic Research Consortium

 

Globally, there appears to be surprisingly little relationship between government expenditure on basic services and the actual level of service delivery. This suggests that there are potentially severe problems in getting good value for money which are better tackled in some countries than in others. How do recipients of a service get good value from providers? For most services the market provides a simple and highly effective solution: services are bought by consumers in conditions of competition among suppliers.
 
This essay attempts to place the provision of social services such as education and health in the principal-agent model as a framework for analyzing accountability.

 

A system of accountability for the provision of basic social services has two components. One component aligns the interests of workers in the service delivery units with social costs and benefits so that they maximize the productivity of the inputs under their control. The other component aligns the interests of the budgetary decision takers with social costs and benefits, so that the scale and allocation of financial resources is socially optimal.
 

 

The starting point of the principal-agent framework is that the principal is dependent upon the agent for the attainment of some objective. The principal may be a parent who wants his child to be well-taught, and the agent the school teacher whose effort determines the quality of teaching. If the agent shares precisely the same interests and concerns as the principal there is no agency problem: the agent will always do his best to fulfil the objectives of the principal. Such coincident interests are relatively unlikely.
 

 

Where the preferences of the agent diverge from those of the principal they are sometimes termed dissonant. This creates the scope for moral hazard: in the absence of appropriate incentives the agent will maximize his own interests, not those of the principal.