Policy-Makers, the International Community and People Living with HIV: The Need for New Commitment Mechanisms

Kjell Hausken and Mthuli Ncube ()

No 2015/6, UiS Working Papers in Economics and Finance from University of Stavanger

Abstract: In order to determine the optimal allocation of responsibilities in disease interventions, and in designing commitment mechanisms, the paper develops a three-period game comprising policy- makers, the international community providing financial aid, and individuals. A policy-maker chooses, in period 1, a fraction of funds to be allocated to disease prevention, and the remaining fraction is allocated to disease treatment. The policy-maker chooses additional funds provision in period 2 for disease treatment. The international community chooses funding in period 3 for disease treatment. Persons engage in risky versus safe behavior which may or may not cause disease contraction. When the international community funds, the policy-maker free rides by not funding additionally. We determine which factors impact how the policy-maker allocates funding between disease prevention and treatment. If the policy-maker funds substantially, the international community free rides by funding less. We quantify how more allocation of funds by the policy-maker to disease prevention causes lower disease contraction probability and higher probability that a person remains sick or dies, and how the international community’s funding impacts these two probabilities. We derive seven assertions from the properties of the model. The model is also tested against empirical data on Africa. The results show consistency between the theoretical model and empirical estimates.

Keywords: Public Economics; Public Choice; Health Economics; Disease; policy; game; funding; prevention; treatment; resource allocation; free riding; risky behavior. (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2015-05-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://dl.dropboxusercontent.com/u/8078351/uis_wp ... _2015_06_hausken.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:stavef:2015_006

Access Statistics for this paper

More papers in UiS Working Papers in Economics and Finance from University of Stavanger University of Stavanger, NO-4036 Stavanger, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Bernt Arne Odegaard ().