Growth is good. So are health and education. Malnutrition is bad. As I noted in my last column, everyone, including those involved in India?s growth debate, agrees on these things. But differences emerge in recommendations for how to improve India?s human development status. Malnutrition is a good example. One view is that focusing on growth alone diverts attention from tackling problems like malnutrition. Another view is that accelerating growth is crucial to generate the resources for addressing such problems.
Last time, I suggested that the government could do better by leveraging the private sector more. This may seem to be a tall claim.
After all, the private sector seeks profit and the children of the poor are an unlikely source for that. And malnutrition is not an obvious headline grabber, nor a problem with a single cause, which permits easy focusing of policy attention. Let?s dissect the problem and see if the claim can hold up to scrutiny.
India?s malnutrition problem is a longstanding one. Worryingly, and relevant for the growth debate, the recent growth acceleration has not led to as rapid a decline in malnutrition as might have been expected. The government?s Integrated Child Development Services (ICDS) programme is decades old. Five years ago, a World Bank discussion paper analysed the weaknesses of ICDS. These include (but are not limited to) failures to focus adequately on the periods of greatest importance, namely pregnancy and the first two years of a child?s life; to train ICDS workers adequately; to educate parents on child care; to provide well-targeted and sufficient micronutrients; and to coordinate with Reproductive and Child Health programmes and other health or health-related services.
The study?s recommendations are crisp and clear. They include better targeting, better training of workers, better monitoring and evaluation, feedback loops so that data that is collected is actually used to adjust implementation, greater community involvement, more coordination with health programmes, and greater attention to education of parents on child care and feeding practices. Interestingly, and rightly, these recommendations stay away from generalised wailing about poor governance or societal gender bias?those things matter but cannot be fixed easily or quickly. Programme redesign is a much more tractable approach. The report also does not emphasise throwing more money at the problem. Of course growth generates additional monetary resources but the binding constraint here is not necessarily money.
This brings me to my topsy-turvy claim that the private sector can help with a problem where (about which) they should not care at all. The central and well-recognised problem in India?s delivery of public services is the poor incentives of government employees. Last time, I gave three examples of using private sector providers to increase access to hospitals or clinics for childbirth: Chiranjeevi empanels private doctors, LifeSpring received start-up capital from the government and the Merrygold network creates a franchise with government-funded training and brand-building. Private sector standards are raised, the profit motive is harnessed for efficiency, and the poor are subsidised without direct government provision.
But maternal deliveries are well-defined, short-term interventions, susceptible to measurement and process efficiency monitoring. Malnutrition is a tougher nut to crack. That is true. But progress on malnutrition can be measured: weight and height measurements, including those at birth, are standard benchmarks. A monetary incentive scheme tied to achievement of goals is at least conceptually feasible and data can be audited to prevent fraud. And it is much easier to implement outside the government sector, in which employment tends to become a welfare programme itself. In fact, sites such as LifeSpring and Merrygold hospitals could be launching pads for the kinds of refocused interventions on malnutrition that are recommended by the World Bank study. In other words, redesigning ICDS may be inferior as a starting point for reform, compared to new programmes that piggyback on the childbirth interaction between health professionals and families. The critical period for tackling malnutrition lies on either side of childbirth, making providers of institutional deliveries a pivotal group.
The approach I am suggesting here is pay-for-performance. Performance has to be well-defined, measured and monitored. But this is possible for malnutrition, even if more complicated than simply counting institutional births. Pay-for-performance will let service providers optimise their own production methods: the World Bank study shows that the knowledge is not lacking, only the incentives. Separating service delivery (where the government functions poorly) from access and affordability can work for fighting malnutrition. Managing access requires enforcing eligibility. This is where the Unique Identification Authority (UID) project will help. Ensuring affordability requires proper payment mechanisms for subsidising the poor: here the government is weak internally as well as in paying private providers, but Chiranjeevi showed this weakness can be overcome. The government can tackle these two components of a public-private partnership. Improving service delivery could come from improved government functioning, but that is a slow and uncertain approach. Harnessing, supporting, improving and expanding private sector delivery of ?malnutrition-reduction? services would be quicker, cheaper and more certain.
?The author is a professor of economics at the University of California, Santa Cruz