PHN Technical Note 86-15 Public Disclosure Authorized

PAYING FOR HEALTH AND SCHOOLING SERVICES IN RURAL AFRICA: A MALI CASE STUDY

by

Nancy Birdsall Francois Orivel Martha Ainsworth Punam Chuhan Public Disclosure Authorized

December 1986

Public Disclosure Authorized Population, Health and Nutrition Department World Bank

The World Bank does not accept responsibility for the views expressed herein which are those of the author(s) and should not be attributed to the World Bank or to its affiliated organizations. The findings, interpretations, and conclusions are the results of research supported by the Bank; they do not necessarily represent official policy of the Bank. The designations employed, the presentation material, Public Disclosure Authorized of and any maps used in this document are solely for the convenience of the reader and do not imply the expression of any opinion whatsoever on the part of the World Bank or its affiliates concerning the legal status of any country, territory, city area, or of its authorities, or concerning the delimitations of its boundaries, or national affiliation. HiN Technical Note No. 86-15

PAYR= FOR HEAI AlM S(HXLU1 SERVICES IN RURAL AFRECA: A MALT CASE SLUIY

ABSTRACT

.This study reports on analyses of bousehold demand for health, schooling and water supply services in an impoverished region of the African Sabel. Te ability and willingness of households to pay user fees for these services is assessed. The effect of introduction of such charges on demani among low-incne groups most in reed of the services is analyzed. Data for the analyses come fran surveys conducted in the Kayes region of the Republic of Mali, an area typical of the l1ast-developed rural-areas of the Sabel, including a survey of households, surveys of health posts, schools, and drug outlets, and village group surveys.

The analyses presented highlight the importance of service-related variables in influencing the use of schooling, health, and water supply services:

* TUstance to the service is a consistently significant determinant of use. Greater distance is associated with louer use of schooling and healt h care, lower drug expenditure, and higher willingness to pay for village wells and health workers.

* The quality of services is also an important correlate of use. School quality-as measured by class size and the number of textbooks-is associated with higher enrollments. Households with access to higber quality drug outlets are more likely to choose modern care or self-treatnent over traditional treatnent, and are less willing to pay for a health worker.

* The effect of user fees on demand--Ohich could only be measured for schooling-is negative, as expected, but small. in magnitude. Households in the majority of villages are willing to finance well maintenance, but not clearly willing to finance community health care provision. Private expenditures on drugs are substantial.

The experience of villages and public facilities in the region studied in collecting and managing fees is extremely limited, institutional development would be a necessary prerequisite for success of any local cost recovery schemes.

Prepared by: Nncy Birdsall Population, Health and Nutrition Department

Francois Orivel, Mjartha Ainswrth, and Punam Chuhan Consultants to the World Bank

Icember 1986 Acknowledgment

Nancy Birds7all is Chief, Policy and Research Division, Population, Health and Nutrition Department. Francois Orivel is Director, Institut de Recherche sur L'Economie'de L'Education, Centre National de la Recherche Scientifique, Dijon, France. Martha Ainsworth and Punam Chuhan were consultants to the World Bank on the research for this study. This report summarizes earlier papers prepared under World Bank Research Project 672-72, Demand for and willingness to pay for health and schooling in Mali. We are grateful to numerous .World Bank colleagues for comments on drafts of those papers. Paying for Health and Schooling Services in Rural Mali

Table of Contents

Pare No.

Introduction ...... d * . .ti * ...... 1

Chapter 1. The Setting ...... 5

The Region ...... 5 The Household Survey ...... 6 School, Medical Care and Water'Supply...... 11

Chapter 2. The Impact of User Charges on Household Use of Social Services ...... 24

Fees, distance and quality in a model of household demand ...... 24 The case for user fees ...... 26 Will fees exclude the poor?...... 31

Chapter 3. The Demand for Schooling ...... 32

The effect of distance ...... 36 The effects of school quality...... 37 The effect of other variables...... 38 Elasticities of demand ...... 39 Policy Implications...... 42

Chapter 4. The Demand for Medical Services...... 45

The Demand for Modern Drugs...... 45 The effect of household characteristics...... 47 The effect of service characteristics...... 47

The Choice of Provider ...... 49 The effect of household characteristics...... 51 The effect of service characteristics...... 53 Policy Implications...... 54 Page No.

Chapter 5. Ability and Willingness to Pay for Health and Water Projects ...... 56

Description and costs of the proposed projects . . ' 56 Household ability to pay ...... 59 Willingness to pay ...... 63 Determinants of demand ...... 67 Organizational capacity of villages for cost recovery...... 71 Conclusions ...... 74

Chapter 6. Conclusion ...... 77

Epilogue ...... 78

Annexes

1. Summary of the Mali Surveys...... 0 2. Note on the calculation of Household Income...... 89 3. Note on the Model of Household Demand...... 91 4. Means and Standard Deviations of Regression Variables. . . . . 94

References ...... 99 List of Tables

Table No. Page No.

1.1* Household Income by Source ...... 8 1.2 Agricultural Production...... 10 1.3 Opportunity Costs of Schooling ...... 15 1.4. Choice of Treatment for Different Conditions ...... 22

3.1 Household Demand for Schooling Regressions ...... 34 3.2 Elasticities of Demand for Schooling ...... 40

4.1 Expenditure on Modern Drugs Regression ...... 46 4.2 Type of Medical Consultation by Disease...... 50 4.3 Multiple Logit Results of Demand for Curative Health Services...... 52

5.1 Amounts to be Paid by Villages for the Water Supply and Health Projects...... 58 5.2 Household Expenditures, 1980-81...... 61 5.3 Willingness to Pay for Water and Health Projects by Cercle...... 66 5.4 Willingness to Pay for Village Well Maintenance. . . . . 68 5.5 Willingness to-Pay for Village Health Worker ...... 70 Introduction

Provision of schooling, health care, and potable water have been major strategies for reducing absolute poverty the world over. More schooling increases household productivity and income, improves the health and nutrition of the family, and reduces fertility. Better health services and safer water in more abundant quantities improve the health of household members which in turn improves their productivity and income. Better health and more education are, in addition to their investment qualities, goals in their own right.

These services stand to benefit the poorest people in the poorest countries the most, yet it is precisely the poorest countries -- particu- larly those in Africa -- that .can least afford to finance them. Health and schooling services in these countries are typically provided to users at no charge or at highly subsidized rates so as not to discourage consumption by the poor. But due to financial constraints, services are often thinly spread and of poor quality. In many of these countries, fewer than half of school aged children are enrolled in primary school and perhaps only one quarter to one half of the population has access to medical care.

Publicly-provided health and schooling services lack critical inputs, such as drugs and textbooks, reducing their effectiveness.

Given projections of slower economic growth and the continuing difficulty of governments in raising general revenues, additional public spending to expand and improve such services is unlikely in the short -2- term. The question arXses whether alternatives are possible: improving program efficiency and lowering unit costs to extend services without increasing spending; or funding expansion by recovering some of the costs directly, through user fees, communi y participation funds and user-supported insurance schemes.

This study reports on analyses of household demand for health, schooling and water supply services in an impoverished region of the

African Sahel. The purpose of the analysis is to assess the ability and willingness of households to pay user fees for these services, and in particular whether introduction of such charges would constrain demand among low-income groups most in need of the services.

Data for the analysis come from surveys conducted in the Kayes region of the Republic of Mali, an area typical of the least-developed rural areas of the Sahel. The area is characterized by rugged terrain,

poor communication and transport facilities and a dispersed population.

Per capita income is below $200, among the lowest in the world. Fewer than

one fourth of school age children are enrolled in primary school, infant mortality is about 255 per 1000 and life expectancy at birth only 32

years. The population is engaged in subsistence agriculture and the area

is subject to periodic drought.

Data from three different surveys are used:

* A household survey that reached 186 households in 38

villages. This survey was conducted in 1981 to provide -3-

baseline information for the design of World Bank health and

water supply projects. The villages were selected from among

those suffering from water scarcity. Four to five households

were randomly selected to be interviewed within each village.

* A community survey conducted nine months later in the same

villages. Male and female respondent groups were interviewed

to ascertain the availability of schooling, health, maternity,

pharmacy and water supply services and local attitudes toward

them.

* A service survey,,conducted at the same time in the nearest

school, dispensary, phrmacy and maternity ward for each

village. The heads of these facilities were interviewed

regarding service statistics, the qualifications of staff,

types and costs of services, and the availability of critical

inputs (such as schoolbooks and drugs).

The report is organized as follows. In the first chapter, characteristics of the households in the sample and the nearest health and schooling services are.described. In Chapter 2, a model of household demand for health and schooling services is presented and the conditions under which an increase in user fees may increase use of a service are postulated. In the next two chapters, the determinants of demand for schooling (Chapter 3) and health care (Chapter 4) in the survey area are analyzed, using household data and variables representing the accessibili- ty, costs, and quality of services. In the fifth chapter, the ability and 州 Chapter 1. The Setting

The area under study is located in Mali, a landlocked West

African country straddling the Sahel. With a 1982 per capita income of

$180, Mali is among the poorest countries in Africa and in the developing

world. This chapter describes the region, the households surveyed, and

characteristics -of the public services available to them.

The Region

Households for this study came from three administrative

districts, or cerc."Les, in Western Mali; Bafoulabe', Kenie"ba and Kita.

Bordered by Guinea to the south, Senegal.to the west and the dry Sahelian

zone to the north, the area is dominated by highlands and sandstone

plateaux. Vegetation'is'generally of the "Sudanic" type.consisting of dry

grasses and occasional stands of trees. It is easily one of the most rugged and remote areas of'Mali.

Transport is extremely difficult. Although the railway runs

through Bafoulabe' and Kita cercles on tke way to the Senegalese coast, it

serves only nearby villages. There are no paved roads, and during the

rainy season much of the region is isolated from the rest of the country by

flooding. The average village among those surveyed was 50 km from the

nearest market. According to the community survey, most transport was by bicycle or on foot. Settlements in the region are generally small and dispersed. The

population density of about 5 persons per km2 is one of the lowest in Mali

outside of the desert. The population is dominated by the Sarakholle in

Bafoulabe and by the Malinke in Kita and Keni4ba. Peulh and Bambara

minorities are also present in the area. Islam and indigenous religions

are both widely practiced.

Principal economic activities include rainfed agriculture,

livestock and, in Kenieba, gold mining. Millet and sorghum are the major

.subsistence crops, and groundnut is the principal cash crop. Although

yearly average rainfall is not particularly low (600 mm in the north to

1400 mm in the south), all precipitation occurs during a four-month rainy

season. Over the last decade the area has been subjected to drought about

one year of every two.

The Households Surveyedl/

The survey reached 186 households with 2,430 persons, for an

average household size of about 13 members. The household was defined as

everyone within a compound that cultivated collective fields and ate meals

together; persons living elsewhere but contributing regularly to household

income were also included as household members. Of the 2,430 persons enumerated, slightly more than half (56 percent) were between 13 and 55

years of age, 34 percent were below 12 years and 10 percent were over 55.

1/ Additional data on households are tabulated in: R9publique du Mali, Societe Nationale d'Etudes pour le Developpement (1982). -7-

Roughly half of all household members were economically active.2/ In addition to those present, 275 household members were living elsewhere and sending remittances home: 20 percent were in Bamako, the capital city of

Mali, 16 percent were in France,,28 percent were in other African countries and the remainder were in other parts of Mali.

Per capita income in the households surveyed was about 55,000

Mali Francs (MF) in Kita, 70,000 MF in Bafoulabe', and 85,000 MF in Keniba

(Table 1.1).3/ In 1981 US dollars, this is around US$90 in Kita, US$100 in Bafoulabe and US$130 in Kenieba. 4/ These figures are below the national estimate of US$180 in 1982. Because the national estimate does not use buying prices to value consumption of home production, as was done here, the difference between the three cercles and the national average is probably greater.

Households in the three cercles derived most income from four sources: crops, livestock, remittances and gold mining. The difference in source of income among the cercles is striking. Crop production accounted for three-quarters of income in Kita households, compared with only about a third of income in Bafoulab6 and Keni6ba. The major source of income in

Bafoulabe was remittances (43 percent of income), and in Kenieba gold

2/ Persons named by respondents as present and currently working. Inactive members were persons named as too young, too old, or too sick to work.

3/ For method of calculating annual income, see Annex 2.

4/ 1981 exchange rate, US$1.00 = 543 MF. 기 9

mining (37 percent of income). Thus, the households surveyed in Kita had

lowest per capita income, some 90 percent of which was based or, agriculture

(crops plus livestock). In Bafoulabe and Keni( ba, per capita income was

higher and more diversified.

The average household in Kita produced three times the volume of

crops as one in Baf oulabe' and more than twice as much as one in Kenie'ba

(Table 1.2). Most of the differences can be accounted for by cash crop

production. Groundnuts, the major cash crop, made up about a third of

total production in Bafoulabe' and Kenielba, and almost two-thirds in Kita.

Subsistence crop production per economically act ve person shows little variation among. cercles.5/

Animals are the main savings mechanism for households, since land

is abundant, there is no housing market, and savings banks are virtually

nonexistent. Cows, sheep and goats are the most frequently raised

animals. The average household in Bafoulabe' and Kenieba had about 20

animals, and in Kita 12.

5/ Regressions of agricultural production per household showed that the

following variables were positively associated with production and

statistically significant at the .05 level or better: the number of

economically active persons and adults; dummies for the cercle of the

household; a dummy for whether the household had made a visit to an

agricultural extension agent; and a dummy for the presence of a modern

community organization (such as a parent association or cooperative).

Neither the schooling variables (number of adults who attended literacy classes, number who had ever attended school) nor a dummy representing

a visit from an extension agent were statistically significant,

although coefficients were positive. - 10 -

Table 1.2: AGRICULTURAL PRODUCTION

- Bafoulabe Kenieba Kita Total Crop n=62 n=54 n=70 n=186 kg. percent kg. percent kg. percent kg. percent

Production per household

All crops 1,507 100 1,932 100 4,438 100 2,733 100 Groundnuts 433 29 614 32 2,714 61 1,343 Subsistence crops 1,074 71 1,318 68 1,726 39 1,390

Production per economically active person a/

All 'crops 255 339 555 477 Subsistence crops 182 231 216 261 a/ Economically active persons.per household: Bafoulabe', 5.9; Keni4ba, 5.7; Kita, 8.0. - 11 -

Educational status was low. Among the households surveyed 44 percent of the children were enrolled in a school. Eight percent of adults had attended literacy classes.

An epidemiological survey conducted at about the same time as the

household survey painted a grim picture of the health status of the

population of Bafoulabe, Kenieba, and Kita. Life expectancy was extremely

low -- only 32 years -- due to shockingly high levels of infant and child mortality.6 / The infant mortality rate was measured at 255 per 1000 live

births, compared to about 120 per 1000 in Bamako and less than 20 per 1000

in industrialized countries. Malaria, diarrheal diseases and complications

of birth took a large toll among infants less than one year of age. Among

children ages 1 to 4, the combination of measles and malnutrition was a

major cause of death and disability. Endemic diseases, such as malaria,

tuberculosis and onchocerciasis, as well as parasitic and intestinal

infections afflicted young and old alike. Inadequatesanitation, poor

hygiene, polluted water sources and the presence of numerous disease

vectors all contributed to this low level of health.

Schools, Medical Care and Water Supply

The schools, medical care, and water supplies available to

households in the 38 villages surveyed were generally far away and of poor

quality. Fees were low, but because of large distances, costs to the

6/ Ecole Nationale de Medicine et de Pharmacie du Mali (1982). - 12 -

typical household in terms of transport and time lost were probably great.

And the low quality of available services limited the benefits of their use. Both service statistics and attitudes exressed during the community survey suggest low demand and underutilization of existing services.

Each service is described below. Particular emphasis is placed on the distance to services, their direct and indirect costs*, and their quality.

Schooling . Mali's formal education system has a compulsory nine-year basic curriculum (enseignement fondamental) consisting of two cycles. The first cycle is six years and culminates with the examination for the first-cycle certificate (CFEPC). 7 / The second cycle lasts three years and concludes with a diploma of basic studies (DEF). Those who complete the DEF may go on to teacher training, specialized training for various civil service posts, or additional formal schooling. For one-fourth of the 38 villages, the nearest school offered only part of the first cycle, for 39 percent the entire first cycle and for 45 percent both the first and second cycle. All of the nearest schools were public; private schooling in Mali accounted for only 4 percent of first-cycle enrollments in 1978-79.

The overall demand for schooling, by all indicators, was low.

Based on enrollments at the nearest school and estimates of the population

7/ Throughout this paper, "first cycle" will be referred to as primary school. - 13 -

of primary school age, we estimate the gross primary enrollment ratio to be about 20 percent. 8 / Neither villagers nor headmasters at the nearest schools reported lack of space as a reason for nonenrollment. Class size for primary classes was only 35, well below the national average of 46.9/

Elsewhere in Mali, particularly in Bamako, demand is higher and supply constraints more apparent.

The average survey village was 7.4 kilometers from the nearest

primary school. There were marked differences in the three cercles,

however. The average village in Bafoulabe was 12.1 kilometers away, that

in Kenieba 7.9 kilometers, and that in Kita 3.1 kilometers. Seventeen

villages (almost half the sample) were more than five kilometers from a

primary school, or farther than could be walked daily. Almost all villages

without easy access to schools were in Bafoulabe and Keniba.

The association is strong between the distance.to the nearest

primary school and the proportion of village population enrolled: about 30

percent of the school-age population was attending school in villages

within five kilometers of a primary school, while only about 8 percent of

the school-age population of more distant villages was enrolled.

8/ The gross primary enrollment ratio is the ratio of total primary enrollments to the number of children in the 7-12 age group. This figure, therefore, includes under and over-age children in the numerator.

9/ Republique du Mali/UNESCO, L'education au Mali (1981), Annex 3.7. -14

Households with children enrolled in school incurred direct costs

1 0 -- parent association and enrollment fees, / school supplies and

transport -- and indirect costs, mainly the opportunity cost of not

employing the child in other more productive activities. The average cost

-of fees at the nearest school and the cost of school supplies for the 38

villages was 4000-4300 MF, or US$7 per .year of primary school. This

represents less than 0.5 percent of household income.1 1 ! Transport costs

were not measured, but would probably far exceed this amount for the 17

villages farther than 5 km from a school.

Although we cannot estimate the opportunity cost of school

attendance to households, observations made at the community level do

permit some generalizations about the opportunity costs to households in

different villages. The survey results indicate a higher demand for child

labor throughout the school year in villages engaged in mining, and a

higher time cost to villages more than five kilometers from a primary

school. Between October and April -- the greater part of the school year

-- demand for farm labor is apparently low, and according to the village

survey, children engage in housework and recreation after school, not

farming.

10/ Contributions to parents' associations in 1974-75 were about MF 1 billion or 10 percent of the Ministry of Education budget for that year. These funds are mainly used for school construction, but it is unclear how the fees are set, administered, and allocated. In the survey villages, the average parent association fee per student at the nearest school was MF 709 a year, or $1.31 in 1981 prices. See R publique du Mali/UNESCO, op.cit.

ll/ Household income was on average about $1,455; see Table 1.1. - 15 -

The highest opportunity costs, therefore, would be borne by parents in the seven mining villages which are more than five kilometers from a primary school (Table 1.3). Households in the agricultural, nonmining villages within five kilometers of a primary school, would bear relatively the lowest opportunity costs (18 villages). Somewhere between these two extremes are the three mining villages within five kilometers of a school and the 10 nonmining villages more than five kilometers away. In the first group, the demand for child labor during the school year is higher, but children could presumably work after school. In the second group, the demand for child labor during the school year is low7er, but no time is available from children attending school because they must live away from home. The opportunity cost is relatively higher for girls than boys, based on higher year-round demand for their work in both mining and nonmining villages.

Table 1.3: OPPORTUNITY COSTS OF SCHOOLING

Village Distance from school economy 5 km 5 km

Mining and agriculture medium high

Agriculture only low medium

The quality of schooling in Mali -- judged by physical facilities, teaching aids, and operational efficiency -- is among the lowest in the world, generally similar to that of its Sahelian neighbors.

Roughly 27 percent of all students must repeat a grade for any year of primary school and 8 percent of students drop out. Only 60 percent of - 16 -

children who enroll in the first grade reach grade 6, and fewer than half

reach the second cycle. Crumbling infrastructure, inadequate teacher

training, frequent lack of teaching aids, shortages of funds for salaries,

maintenance, and supplies -- all these plague the Malian school systeni.

In the schools surveyed, the teachers on average had received 11

years of formal schooling, were 31 years old, and had been teaching for

about 7 years. School buildings, on average, were 27 years old. Seventy

percent of classrooms were of mud brick construction. Even concrete

classrooms were dilapidated and in need of repair, with many dating from before independence. None of the schools visited had a working school canteen or housing for students living away from home.

Teaching aids were in extremely short supply. There were six textbooks per 100 students, or only 2.5 books per class. Seven of the. surveyed schools had no books, so that even teachers lacked access to books to plan their lessons. There was generally one blackboard per class, but four of the 21 schools had no chalk. Headmasters nevertheless indicated that all subjects from the standard curriculum for the first cycle were taught.

Thirty-seven percent of the children erolled in grades 1-6 at the nearest schools were repeating a grade at the time of the survey. Only

39 percent of the children in the survey schools who sat for the CFEPC examination in 1981 passed it. For Mali the average CFEPC pass rate in the late 1970s was 59 percent. 12 /

12/ Republique du Mali/UNESCO, op.cit., Annex 3.7. - 17 -

Medical Care. The two main sources of modern medical care in

Mali are the curative medical facilities run by the state and by private

groups, providing both diagnostic services and drugs, and an organized

network of pharmaceutical outlets run by the parastatal sector. In addi-

tion, there are traditional healers and birth attendants in each village.

The health delivery system parallels the country's administrative

structure of regions, cercles, and arrondissements. At the apex of the

health pyramid in each region is a 150-200 bed hospital and maternal and

child health center. In each cercle is a medical center, a small 10-40 bed

hospital with surgical facilities and a 10-bed maternity ward. In each

arrondissement is a dispdnsary and a rural maternity. The official health

system is supplemented by health services run by private voluntary organi-

zations, such as Protestant and Catholic missions.

The mean distance of the survey villages to the nearest source of

medical care was 14 kilometers. Only eight villages had their own diapen-

saries and only 10 were within 5 km of medical services. About half of the

facilities had motor vehicles to transport sick people, but many vehicles

did not work or could not be used for lack of petrol. For most of the

villages the nearest service was a public dispensary, where the most highly

trained person was generally a state or first cycle nurse. 13 ! Nine villages -- those closer to a cercle-level medical center or private

dispensary -- had access to physicians or university-trained nurses.

13/ The state nurse has received nine years of schooling and three years of training at the Ecole Secondaire de Sant . "he first-cycle nurse, with slightly less formal schooling, is trained in a hospital in Bamako. - 18 -

Drug shortages were a major problem at medical facilities, limiting their effectiveness. An average of only 3 of 11 basic drugs were in stock at.the nearest medical facility for each village. 14 / In fact, the largest facility surveyed, the public hospital in Kita town, had only two drugs of any kind in stock; all the other facilities surveyed in Kita circle had exhausted their drug supplies.

In light of these shortages, it comes as no surprise that only three villages mentioned public dispensaries as the source of modern drugs most often used by the village. For 27 villages, the primary drug source was the Pharmacie Populaire, a parastatal enterprise, or the Federation de groupements ruraux (FGR), a rural cooperative. Private dispensaries or family abroad were the main source of drugs for five villages. All of the villages in Bafoulabe were served by FGRs, while almost all villages in the other two cercles were closest to Pharmacie Populaire outlets.

Drug outlets were better supplied than medical facilities. On average, they carried eight of 11 basic drugs and had a total of about 40 drugs in stock. The FGRs were not as well stocked as Pharmacie Populaire outlets but they nevertheless carried, on average, more than twice the number of drugs as did medical facilities in Bafoulabe.

14/ Included in this list were: aspirin, piperazine (or other anti-worm medicine), chloroquine, iron, cough medicine, anti-diarrhea medicine, sulphaguanidine (or other medicine for intestinal infections), auremycine 1% and 3%, antiseptic and anti-scabies medicine. - 19 -

The inadequate supply of drugs at most medical facilities means that for many ailments the relevant minimum distance for complete treatment was the distance to a drug outlet, not the distance to a dispensary or hospital. Drug outlets were even farther away than medical facilities, however, with 33 of 38 villages more than five kilometers away and a mean distance for all villages of 38 km to the nearest outlet. Villages in

Bafoulabe were closer (21 kilometers) due to the network of FGRs, which are not as prevalent in the other cercles. Villages in Kenieba were the most distant (58 kilometers).

Outpatient care and drugs were provided free of charge at all public and private dispensaries nearest to survey villages.15/ But the drugs, although free, were rarely,available. They usually had to be purchased from a drug outlet. Pharmacie Populaire outlets throughout Mali sold drugs and pharmaceutical supplies for profit. Prices were high -- as much as 150% of the retail price in France. The price schedule was supposedly uniform throughout Mali. Drugs were sold to FGRs at a 15% discount, under the assumption that they would be resold at PP rates with

15/ Only two of the nearest health facilities provided in-patient care: the hospitals at Keni ba and Kita towns. The former made no charges; the latter charged 1,000 MF per hospitalization and 7,500 MF for surgery. Food in both facilities was provided by family. Nurses at two dispensaries in Kita circle claimed to perform circumcisions for a fee of 2,000 MF and minor surgery (tooth extraction, removal of cysts, etc.) for 500-2,000 MF. 20

the difference in price being retained by the FGR. Thus, in theory, drug charges for all households in the survey area should have been the same. 16 / The other major cost was for transport -- of the sick person and, if necessary, for an accompanying family member. The opportunity cost of the sick person's time is lower than for a healthy person, but could still be quite high during peak periods of agricultural work.

In contrast to modern care, sources of traditional medical care were present in -almost all villages. There were about 8 traditional healers per 1000 inhabitants in the villages surveyed. Since traditional healers generally mix their own treatments, traditional drugs were also readily available. About a third of the illness episodes reported by households were treated. by a traditional healer alone, and another 28 percent by both traditional and modern practitioners. Ninety percent of the 104 births reported in the household survey were deliveredby traditional birth attendants (TBA); there were nine TBAs per 1000 population in the villages surveyed.17!

The transport costs and opportunity cost of time spent seeking treatment by traditional healers were, therefore, negligible. The major costs were direct payments for treatment. While patients sometimes pay --

16/ An attempt was made to compare prices at PPs and FGRs, but it was thwarted by the differences in brand names, products and packaging. Chloroquine, for example, was stocked in tablet form in some outlets, in syrup form in others, and in injectible form in yet others.

17/ The number of state midwives in 1979, by comparison, was one per 28,000 inhabitants for all of Mali, or 0.036 per thousand population. (R publique du Mali/UNESCO, op.cit.) The average village surveyed was 23 km from the nearest modern source of maternity care. -21-

in cash or in kind -- for a conpultation, payment is normally made after the treatment or cure. The amount paid varies with the severity of the illness and the economic circumstandes of the client's family. The poorest clients may be helped by family or ,eighbors to pay, may go into debt, or may be treated free. Only one respondent group in the community survey said that poor people may not be treated at all because of inability to pay. According to respondent groups in the village survey, healers were typically paid 100 MF for headaches, 330 MF for fevers, 2,300 MF for stomach aches, and 2,400 MF for broken legs. The average amount paid for delivery by a TBA was 600 MF on the household survey; other payment for deliveries is generally made in kind.

The effectiveness of treatment by traditional healers varies.

Treatment of psychosomatic symptoms, for example, may be very effective.

Other practices, such as withholding food and fluids from children with measles, can be harmful if not fatal.

Despite high levels of morbidity and the scarcity of medical

services, demand for.modern services was low. The facilities closest to

survey villages treated less than one person per manhour of health services

offered. Further, the survey was conducted during the dry season, when the

opportunity costs of using modern services is lowest. The large distances,

lack of drugs at the nearest facilities and their high cost at drug outlets

probably contributed to low use. Results from the village survey reveal

that use of the modern health system was reserved for only the most serious

ailments (Table 1.4). Traditional healers, for example, were deemed - 22 -

adequate for setting broken bones; the formal health system is preferred for leprosy, blindness, or a major burn or wound. Headaches, diarrhea, and fever are the most likely symptoms to be treated at home or ignored.

Table 1.4: CHOICE OF TREATMENT FOR DIFFERENT 00NDITIONS (Figures are the number of villages responding.)

Type of Treatment Condition Self-treatment Traditional healer Nurse n

Headache 22 5 9 36 Stomachache 11 14 12 37 Fever 15 10 12 37 Diarrhea 18 6 13 37 Broken leg 0 33 4 37 Major cut or wound 3 9. 25 37 Major burn 2 9 26 37 Cough 10 5 21 37 Leprosy 0. 2 28 30 Blindness 0 10 24 34

Water Supply . Wells were the major source of water year-round for drinking, bathing and laundry in the village§ surveyed. There were an average of 32 wells per 1000 population in these, villages, with only 26 per

1000 in Kenieba, 29 in Bafoulabe and 38 in Kita.18 / Over 9 were privately owned. Among households in the sample, 28% had*a well in their own compound. Wells in this area*were predominantly hand-dug open wells.

Ninety percent of households with a well reported that the well dries up during the dry season. The average household was 860 meters from a year-round water source. Women spent as much as 5 hours a day collecting - 23 -

water in the wet season and 8 hours in the dry season. The mean cost of digging a new well, based on data from only 6 households who dug one in the

12 months before the survey, was about 25,000 MF, or $ 46 at 1981 exchange rates.

Despite apparent low levels of-health and education in the villages surveyed, the demand for available services appeared to be low.

Although services were scarce, they were not fully utilized. Only in the case of water did there appear to be a supply constraint, particularly in the dry season, when many wells dry up.

In the case of health and schooling, what accounts for low demand? The results of the community and service surveys presented in this chapter provide some clues: schools and drug outlets may be too distant; the quality of schools and of modern medical facilities may be so low that investment of household time and resources seems uneconomic; existing fees in schools and drug outlets may be unaffordable; the opportunity costs of use may be too high. In the next chapter we present a model for analyzing the effects of user fees, quality, and distance on household demand. Chapter 2. The Impact of User Charges on Household Use of Social Services

This chapter provides a framework for analysis of the effect of user charges on the demand for and utilization of social services in poor countries. As we have seen in Chapte.r 1, households in the area under study were very poor and the services available to them, though provided nominally free of charge or for a small fee, were distant and of low quality. Demand for schooling and medical services appeared low. There

was no evidence that potential users were being turned away at the door; in fact, classes were smaller than the mean for the rest of the country and health personnel served only one person per manhour. Only for water supply

-- which went dry during several months of the year -- was there possibly excess demand. Distance and quality -- not existing user fees -- at first glance appear to be constraining demand.

In this situation, is there scope for increasing user fees to finance expansion and improvement of services without reducing already .low levels of demand? What would be the effect on the poor? In the discussion that follows, we show that under certain conditions user fees may actually increase demand if fee revenue is used to reduce the distance to services and/or improve their quality.

Fees, distance and quality in a model of household demand

Household demand for a social service is a function of household income,1/ the costs of using the service, the prices of all other goods

1/ We assume here that capital markets are imperfect, that is that households cannot borrow against future earnings. - 25 -

and, because services such as schooling and health are also an investment in future welfare, factors affecting the "retiirns" on use of the

2 services. / The costs of using a service include the "price" of the service (user fees, drugs, school supplies), the costs implied by the distance to the service (transport expenses and the opportunity cost of transport time) and the opportunity cost of consuming the service, in terms of forgone income or leisure. In the case of schooling, for example, the opportunity cost would be the product of the potential wage rate for children (or their average contribution to income earned per hour of work) and the time spent.in school.

Among variables influencing the "returns" to consumption of schooling and health care are the quality-of the service and. characteristics of the person in whom the investment is made. The quality of schooling and the ability and sex of a child, for example, influence the expected amount of income that that child will earn later per unit of time

3 spent in school. / In-the case of health, the quality of medical services and personal characteristics, such as age and the degree of infirmity of the sick person, influence the probability that the person will fully recover and be productive in the future.

2/ In the case of health, we speak of demand for medical services, given some morbidity, part of which is random and part of which is a function of prior health (consumption of health care in an earlier period). Derivation of this model is treated in Annex 3.

3/ Other characteristics include ethnic group and parents' education. The latter is likely to increase consumption of complementary services that will enhance results, such as investments in children's health that will enhance schooling returns. Parents' education also implies lower information costs regarding the returns to education. - 26 -

Thus, the function describing household i's demand for a service

in area j can be written:

Dij Dij(Pjj Qj, Kj, wj), Yi, Ci, Poj)

where Pj is the price of the service in area j, Q is the quality of the

service, Kj is the distance of the service, wj is the opportunity cost of

time, Yi is household i's income, Ci represents personal characteristics

that could influence the expected returns to.the service and Poj the prices of other-goods in the area. Note that one set of households may have higher demand than,another, even with the same user fees, income, personal characteristics and opportunity costs, if they face two different situations with respect to the quality or distance of the service.

Government can affect the demand for the service in the short to medium run by changing user fees, raising the quality of the service and expanding the network of facilities to reduce the average distance from households. To raise income or change the relative opportunity cost (for example, the price of child labor), it has less obvious and indirect long-term policy levers.

The case for user fees

All other things being equal, an increase in price for a given good or service will normally lower demand. However, private demand is constrained not only by fees charged, but by the travel and time costs associated with using a service and by its quality. An increase in price - 27 -

for a service need not lower demand -- and may well increase it -- if it is associated with a change in the nature of the service.

Consider the following example. In many countries, the costs of personnel who work in education and health absorb 90 percent or more of recurrent budgets allocated to those services. In the face ,of cutbacks, it is difficult for government to reduce the workforce in the short run. Thus wages and salaries cannot be cut, and represent fixed costs in a political sense. However, these personnel must have complementary inputs to perform efficiently: drugs, petrol, textbooks and other educational materials. It is these complementary inputs which are often shortchanged in the face of spending constraints and, because they constitute a small part of expenditures compared with personnel, relatively large reductions in these inputs may be necessary to achieve any absolute cut in total expenditures.

The result of such cutbacks can be a dramatic decline in the quality of a service or, in the case of health personnel who cannot travel, a dramatic increase in the distance would-be clients need to travel to use a service.

For this reason, a relatively small increase in revenues, if used to finance such complementary inputs, can result in a large increase in demand due to better quality and/or reduced distance.

The idea of the model and its application to the user fee issue is illustrated in Figures 1 and 2. In Figure 1,4 / the horizontal axis, Q, represents the quantity demanded of schooling, and the vertical axis, P, the user fee. Ds is the social demand for schooling, D1 the private demand

4/ Figure 1 is due to Thobani (1983), modified to show no excess demand. He is concerned with the situation where excess demand is observed. For a fuller discussion of the issue when excess demand is not observed, see Birdsall (1983). -28

Figure 1

Di D

PIe

91Qf Q0

1 me'

Figure 2

Dl D2 Ds

pme

ss

Q Q0

Q1 Qf Q2 Q0' QO - 29 -

(with the difference due to positive externalities and/or imperfect market

5 conditions /), and Pmc the marginal cost of providing schooling. SS is a locus of points showing the quantity of the service the government can supply at different levels of user fees. (The important assumption is that the government budget for schooling is fixed and that fee increases are used to expand the system.)

As drawn, the government can provide exactly Qf at no charge, just meeting private demand. However, the optimal amount of consumption is

Qo, where the social. demand curve intersects the marginal cost curve.

Thus, even with no charge there is a less than optimal consumption of schooling. There is neither excess demand nor excess supply; the system is at a low-level equilibrium.

In such a 'situation, expansion of the system seems unjustified.

If there were excess demand as evidenced by rationing of the service -- for example, by restricted entry to school via entrance examinations -- an increase in user fees could permit the government to expand the service and reduce the degree of rationing. But in this case of low-level equilibrium, it is clear that any increase in the fee charged, say to P1 , would, all other things the same, reduce consumption still further, to Q1*6/

5/ Without such a difference between private and social demand, the most efficient price to charge would be the marginal cost. In the case of health and water, the most obvious externality is due to disease being contagious. An individual who incurs costs to safeguard his own health does not capture all the benefits; neighbors who are less likely to be infected also benefit.

6/ Clearly the government could incrzase demand by reducing price still further to a negative amount, that is, a subsidy. The question is whether government could afford it. Subsidies have been provided in some countries for services such as higher education and as an incentive for family planning (e.g., persons who undergo sterilization are given cash or other goods). - 30 -

As we have seen, however, demand is constrained not only by price

(movement along the vertical axis), but by the quality and distance of services. For purposes of exposition, a reduction of average distance or improvement in quality will be represented by an outward shift in the demand curve.

In Figure 2, the household is paying a user fee of P1, but the government has used fee revenue to expand services and reduce the average distance to schools. As a result, the demand curve for the household has shifted outward, to D2 . Note that, as drawn here, the quantity demanded of the closer service, Q2, is greater with the fee than the quantity demanded of the free but more distant service (Qf). With higher quality or lower average distance, there may of course be an increase iii marginal costs

(unless they can-be kept constant through more efficient allocation of resources), shown as the new marginal cost line mc', and resulting in a shift upward of the SS curve (SS'). Obviously, the less marginal costs increase, the greater the net increased social benefit.7 /

Of course, these results depend on a set of special circumstances. If average distances are already low, the demand curve is unlikely to shift outward very far, if at all, with an expansion of the school system and user fees might actually reduce consumption. If fees are already high and demand for schooling is very elastic with respect to fees, consumption might be reduced even if closer services moved the demand

7/ Note that if the social demand curve also shifts out (for example, because of higher economic returns to higher quality schools), th- optimal amount of schooling from a social point of view might not decline, even with the increase in costs. - 31 -

curve far out. To assess the impact of use.r charges when the quality and

distance of services will be improved, we need to know:

-- the amount by which the demand curve shifts outward

with an improvement in quality or a reduction in

distance -- that is, the elasticity of demand with

respect to these factors;

-- the slope of the demand curve -- that is, the

elasticity of ddmand with respect to a fee; and

-- the extent to which an increase in fees could generate

en.;ugh revenue to pay for services that are closer to

households and/or of better quality. 8!

In the next few chapters, we report on the quantitative importance of these

factors and their net impact'on demand.

Will fees exclude the poor?

User fees, like head taxes, are regressive; alternative taxation

methods for financing social services might be preferable. But the issue

under discussion here is the impact of user charges given a constraint on

government spending in a particular sector. Alternative financing methods

are assumed not to be viable or to be already in use as much as

8/ As services like education tre extended to more and more remote areas, long-run marginal costs could well rise; we know surprisingly little about the path of costs under different circumstances. However, at least in this region of Mali, substantial improvements in quality are probably possible without much increase in marginal cost, as discussed below. - 32 -

administratively or politically possible. A more relevant concern is

that user fees might exclude the poor. If the demand for such services

among the poor is highly fee-elastic, an increase in fees could reduce

use of the service by the poor.

To estimate the impact on the poor, the same information noted

above is necessary: the elasticity of demand with respect to distance,

quality and fees for poor households, and the relation between fees and the

costs of expanding or improving services. Of course, if fee revenue from

the poor is not used to improve the quality or reduce the distance of their

services (for example, it is used for services for the rich, or to compen-

sate for declining funding of the service from other sources), then fees

will surely lower their demand. And to the extent that the poor already

have good access to services of reasonable quality, an increase in fee may

well reduce their demand. This may be the case among the urban poor.

However, in the region of Mali discussed here and throughout

rural Africa the use of available services is clearly limited by distance

and quality. These factors imply privatu costs, direct and indirect, which may far exceed the cost of existing user fees and certainly exceed the

total costs faced by urban dwellers. In rural areas, the overall cost of using a service could well fall with a higher fee if the service were

provided closer. All income groups in rural areas would benefit from lower costs, especially the poor. And to the extent that rural services are of relatively low quality, an increase in quality would increase the private and social returns to investments n health and schooling by the poor. Chapter 3. The Demand for Schooling

In this chapter the effect of school fees on primary school

attendance is measured. The elasticity of demand with respect to fees is

estimated and compared to the effects of the distance and quality of

primary schools.

Table 3.1 shows the results of two regressions in which a dependent variable representing a household's demand for formal schooling

is estimated as a function of household income and the "price" variables of the 'model outlined in Chapter 2: distance to the school, measures of school quality and the amount of the parent association contribution parents are expected to pay. 1 /

The dependent variable,.representing the demand for schooling, is

the difference between the number of persons in the household currently enrolled in school and the number of persons in the household aged 6 to

14.2/ Unfortunately the household data do not show which household mem-

bers were enrolled but only the total enrolled; thus, the number enrolled may include some persons under age 6 or over age 14, and we cannot control for age and sex. The dependent variable is a relatively.crude measure of

household schooling demand.

1/ For definitions of the variables, their means and standard deviations, see Annex 4.

2/ A Tobit regression was also run, using as the dependent variable the ratio of number of persons in the household currently enrolled to number aged 6 to 14. Signs of the coefficients were consistent with the results shown; only the distance variable was statistically significant. See Birdsall and others (1983). -34-

Table 3.1: ]BOUSEBOLD DEMAND FOR SCHOOLING REGRESSIONS (t-statistics in parentheses)

Dependent variable: Number of persons enrolled minus number of persons aged 6-14 (1) (2) Household variables: Natural logarithm 7.126 -.459** of household income (.62) (-2.59) Number of persons aged .651** 15 to 50 divided (6.63) by persons aged 6 to 14'

School quality variables: Average education of .622 -4.07* teachers (.32) (1.94) Student-teacher -.0516 * -.0804** ratio (-1.72) (-2.10) Index of number of .0521 -.0227 grades in school (.247) (.089) Number of books per .0924 .118** classroom (1.35) (2.17) Number of weeks since -.0885 -.138** teachers paid (-1.57) (2.02) Proportion of students -.0477 passing primary school (.055) leaving test

School fee variables: Natural logarithm of fees -.343 -1.95** to parent association (-.405) (-2.42) Dummy: enrollment fee is .984* charged at nearest school (1.77)

Distance to school variables: Kilometers from village -.0558** center to nearest (2.16) primary school Dummy: school located -1.26 ** outside village but within (-2.01) 5 kilometers Dummy: school 6-10 -.369 kilometers away (-.579) Dummy: school 11-15 -1.26 * kilometers away (-1.93) Dummy: school 16-20 -2.39 ** kilometers away (-2.52) Dummy: school more -2.81 ** than 20 kilometers away (-3.49)

Constant -4.26 53.8 R2 .12 .37

N 123 123

* Significant at .10 level. ** Significant at .05 level or better. - 35 -

The school quality, fee and distance variables are the same for

households within villages; they refer to the primary school which is

closest to the village where a household is located.

The effects of variables in the regressions are briefly sum- marized below, then their effects relative to.each other-are considered,

using elasticities derived from the regression results.

The effect of fees

The amount of the expected contribution to the parent association has a negative effect on attendance, as expected, but the coefficient is

only statistically significant in the second regression, where a dummy variable indicating whether a school enrollment fee was also charged is included. 3 / The dummy variable was included here because interviewers reported that enrollment fees were rather arbitrarily set by school directors, and that in villages where demand for schooling was very low, directors set no fee at all. The use of this variable does show that the

existence of a fee is positively associated with enrollment; but the results also show that the size of the fee has a negative effect, once its existence is taken into account.-

3/ All of the nearest schools required contributions to the parent association; about two-thirds of them also had enrollment fees, either for first time registrants only or for all students. The amount of enrollment fees'was not entered into the regression because in many instances headmasters did not indicate whether they were one-time only or annual fees. The mean first-time enrollment fee at schools was 324 MF, and under varying assumptions fees for returning students were 65-253 MF per year. Both are less than half of average parent association contributions. See Ainsworth (1983).

4/ The possibility that fees are positively associated with demand and are in fact endogenous to demand (that is, that they are higher where school principals perceive higher demand), cannot be ignored. However, the consistently negative sign does indicate that, ceteris paribus, fees and enrollment are negatively correlated. (The bivariate correlation of the fee dummy and the fee is +.12). - 36 -

Fees in this region represent only a small portion of the total costs of schooling and, as noted above, are probably not set independent of demand. In the community survey, respondent groups in every village denied that the cost of schooling was a reason for nonenrollment. At only 2 of 21 schools did headmasters believe that costs were a factor helping to explain low enrollment.

The effect of distance

Distance has implications for time and thus for opportunity costs. The farther away a school is, the more time is spent in transit and thus the more time is lost to the household. If the school is so distant that children must live away from home, households lose all the child's work time (as well as the emotional satisfaction parents may enjoy from having their children nearby), and may incur direct costs for lodging and food.

Distance to school has the expected negative effect on demand; the signs on the variables are statistically significant in both

5 regressions. / Dummy variables are used in the first regression to capture whether distance effects are nonlinear. The dummy variables suggest that in fact the negative effect of distance increases at a decreasing rate; that is, that beyond a certain distance, greater distance matters relatively little. This is probably because children are often sent to live outside their own village if there is no school nearby. As

5/ As well as in the Tobit regression, not shown. - 37 -

with the results on fees, those on distance are consistent with the

community survey; in about half of the villages, the fact that the school was far away was reported to be an important reason for nonenrollment. Note that with the use of the dummy variables in the first regression, the absolute magnitude of the coefficient on the fee is lower than in the second regression.

The effects of school quality

There is a large literature on the effects of various measures of school quality on student achievement. 6 / As suggested in the model in Chapter 2, better school quality is likely to increase enrollment as well as achievement of those enrolled because it increases the returns to schooling for a given amount of time and cost. In the region of Mali under study, better school quality may raise enrollment simply by increasing likelihood the that children, once enrolled, will not drop out. In the community survey the primary reason suggested for nonenrollment was children that "dislike school" (cited more often than the need for children work, or to that the school was too distant).. In the survey of school personnel, the "difficulty" of school work for children was cited by 18 of 21 respondents as a reason for children dropping out.' It is not surprising that children have difficulty when the lack of books and other teaching materials means that the main classroom activity is copying and memorizing what the teacher puts on the blackboard.

6/ See, for example, Heyneman and quality has Loxley (1983). a positive effect For evidence that Birdsall (1983). on adult earnings, school see Behrman and - 38 -

In the regressions in Table 3.1, some measures of school quality do have a statistically significant effect on attendance. Teacher educa- tion in column 2 is significant at the .10 level, but has a negative effect. The variance of teacher education was very low, however. The student-teacher ratio does matter in both regressions; the demand for schooling increases with smaller class size. This suggests that economies of scale could not be realized if enrollment rates were increased in existing schools, and costly new classrooms and teachers would have to be added. An index of the number of grades a school has (ranging from I to 4, it is highest if a school has six complete grades) does not affect enrollment, nor does the pass rate on the school-leaving exam. However, the number of books per classroom and the late payment of teachers (perhaps reflecting the general level of administrative support teachers can expect) both have the expected effects, the former increasing enrollments and the latter decreasing them.

Given the small size of the sample and the lack of variance among these schools in quality, the results are quite robust in the sense of indicating the effect school quality can have. At the same time, given multicollinearity among the measures, not too much should be made of the effect of any one measure as opposed to another.

The effect of other variables

Interestingly, the effect of household income appears to be negative when the ratio of adults to children is included in the second regression. This may reflect the contribution of children not in school to - 39 -

income, particularly in the gold-mining area of Kenieba, but since the income data are not specific to individuals we cannot tell.

Ethnic and religious differences across households (not shown) had.no effect on demand once other factors were taken into account. There were Koranic schools.in the region. However they were not viewed as an alternative to formal schooling, according to the village survey. Most

Koranic schools in the region met for an hour or two in the evening.

Indeed, some households had persons enrolled in both formal and Koranic

schools at the same time.

There were also no significant differences in the regression

results across the three cercles. Because the primary economic activity in

Kenieba was gold mining, in which children can be helpful,all year round,

we anticipated a lower demand for schooling there, ceteris paribus. The

lack of any difference underlines the possibility that opportunity cost is

not the major factor limiting demand.

Elasticities of demand

Table 3.2 shows point elasticities of demand with respect to

fees, distance and selected measures of quality, calculated on the basis of

the regression results in Table 3.1. The figures represent the percent

change in enrollment given a one percent increase in the variables on the

left. Point elasticities allow comparison of the effects of small changes

in the different independent variables on the dependent variable,

enrollment. - 40 -

Table 3.2: ELASTICITIES OF DEMAND FOR SCHOOLING

With respect.to: (1) (2)

Contribution to parent -.17 -.98 ** association a/

Distance -.26 **

Quality

books per class .11 .14 **

student-teacher ratio -.47 * -.73 **

number of weeks since teachers paid -.47 -.73 ** af This is the elasticity of the fee 'itself (not of the natural logarithm of the fee).

* The coefficient .in Table 3.1 was significant at the 10 percent level.

** The coefficient in Table 3.1 was significant at the 5 percent level or better.

The importance of parent association fees relative to distance and the quality measures is highly sensitive to the way in which the regression was specified. Where it is statistically significant (column

2), the negative effect of the fee is greater in absolute terms than that of distance. In the second column, for exam; , a one percent increase in fees would reduce enrollment by .98 percint, a one percent reduction in distance would increase enrollment by .2o garcent. Given the low level of existing parent association fees (about 700 MF, or $1.10 per child), it is doubtful that a one percent increase in fees would be adequate to finance the four percent reduction in distance necessary to compensate for reduced demand due to the fee. Even if this were possible, it is not clear that

increases in enrollment would be great enough to keep unit costs from - 41 -

rising. Average village size in the region is only 400. Unit costs are bound to be high where the population is highly-dispersed; the situation is more difficult still where demand for schooling is so sensitive to the distance factor and where transportation is poor. Indeed, it is possible- that enrollment in some existing schools would fall, as children who now attend from outside the village shift to new schools nearer to their, homes. Similarly, fee revenue could probably not finance a large enough reduction in the student-teacher ratio to compensate for the negative effect on enrollment of an increase in fees.

However, comparison of the.relative effects of the books per class variable and the fee indicates that there is some scope for increasing enrollment without adding to the fiscal burden of the central government. Though the point elasticity of demand with respect to books is lower in absolute terms than that of fees, a small increase in fees could probably provide for a dramatic increase in the number of books per classroom. At an average of slightly over two books per classroom, it is obvious that for some subjects teachers currently have no book at all even to guide them in planning instruction. Indeed, the lack of books and other teaching materials may explain the negative effect of the student-teacher ratio, which is otherwise surprising given the relatively small class size. Teachers may be an effective -- though very costly -- substitute for materials. With 34 children in a classroom, an increase of 10 percent in the average fee (from about 700 MF to 770 MF) would produce 2380 MF. If books cost 1000 MF the average number of books in a classroom could be -42-

doubled for a 10 percent increase in fee.7 / The point elasticities shown hold for small changes in the variables. A doubling of the number of books is a large change, and we cannot be sure it would produce a proportionate increase in enrollment of 14 percent (column 2). (Indeed it might produce a greater than 14 percent increase.) If it did however, the net effect of an inrease of 10 percent in the fee, used to purchase books, would be to raise enrollment.

The negative effect.of the late payment of teachers reflects not only a general budget problem of the central government, but administrative and logistical problems. It is possible that fees collected and, more importantly, controlled at the local level, might help provide a less uncertain working environment for teachers and thereby a better learning environment for children.

Policy Implications

It is always dangerous to generalize from a small sample in what may be an unrepresentative area. However, these results do have implications for primary school financing in remote rural regions of

Africa, where the population is highly dispersed, incomes are low and primary schooling is not widely available.

7/ This of course assumes that an effective system for producing and distributing books exists, and that any increment in current fees is used for purchase of books for local use, not channelled to the center to reduce education budget deficits. These a:e strong caveats. -43-

The results indicate that imposing or increasing fees for school- ing would, all other things the same, reduce demand. This is the case even though all fees -- enrollment and to parent associations -- represent a small proportion of the private costs of schooling -- in this region at most 25 percent of direct monetary costs, and an even smaller.percentage of the total costs, which include foregone child labor. 8 / Income is very low in the region and despite de jure compulsory school attendance, the enrollment rate in primary school is less than 30 percent.

The question could justifiably be asked whether there should be any fee at all. On the one hand, our estimate of the annual direct costs of schooling one child amounts to a small proportion of average household income--one-half of one percent. On the other hand, many households will have two or even more children.of school age, and even one percent can be a substantial portion of total income given that the proportion spent on food may exceed 75 percent in some years. From an equity point of view, the case for fees is also weak: small shifts in central government spending on education, away from stipends for university students -- which are extra- ordinarily generous.but benefit very few -- and toward primary schools, could easily make elimination of primary school fees possi.ble.9 /

A case for raising user fees rests on the possibility that such fees could be used to increase local control over quality, for example by

8/ See Ainsworth (1983).

9/ University stipends in 1978 took up about 10 percent of the central government education budget, compared to 22 percent for primary education. Units costs were $55 per primary student and $1,258 per university student. World Bank (1981) Annex 11, p. 28. See also Psacharopoulos (1977). -44-

enabling communities to directly purchase schoolbooks. But local financing cannot itself resolve the problem of production and distribution of schoolbooks. Nor is it clear how such local funds would be administered within commqnities. 1 0 / However, fees at least provide some degree of local leverage, and a point of departure for greater local interest in the educational system.11

In this region of Mali, fees can provide only a partial solution to the quality problem, and even then only given an adequate distribution system for school books. They cannot solve the problem of the high unit costs that would be entailed to provide schools closer to children's homes, given the degree of population dispersion and the lack of roads and transport. The same is likely to be true elsewhere in rural Africa, particularly in the Sahel. The distance problem is not easily solved; but fees provide an entry point for attacking a.severe quality problem in rural primary schools.

10/ See Chapter 5.

11/ For a strong statement on the problem of too much centralization in educational systems, see Schultz (1980),, Chapter 4. The Demand for Medical Services

This chapter measures the effect of household and service

characteristics on household expenditures on modern drugs and on the type

of treatment sought. The effect of user fees was not analyzed because the

survey was unable to collect price .data for medical care. Services at all

the nearest medical facilities to households were free, as were drugs -- when they were available. Both traditional healers and drug outlets

charged fees.

The Demand for Modern Drugs

In the 12 months prior to the survey, the average household

surveyed spent a total of 18,173 MF on modern and traditional drugs, or 4.9 percent of household income. Of this amount, 14,605 MF (80 percent) was for modern drugs.

To measure the influence of household and service characteristics on household demand for modern drugs, we estimate an ordinary-least-squares regression of household expenditures on modern drugs (Table 4.1).1/ The dependent variable -- the natural logarithm of annual expenditure on modern drugs -- is regressed on variables representing household income, schooling and morbidity, and the distance and quality of health services. We hypothesize,that higher spending on drugs will be associated with higher income, higher morbidity, shorter distances to nearest services and better

1/ A similar regression was run on expenditures on traditional drugs. No coefficients were statistically significant. The "cost" variables -- distance to drug outlet and dummy for common location of dispensary and drug outlet -- were opposite in sign, as expected if modern and traditional drugs are at least partial substitutes. Variable definitions, means and standard deviations are in Annex 4. -46-

Table 4.1: EXPENDITURE ON MODERN DRUGS REGRESSION

(Ordinary least squares estimates, t-statistics in parentheses.)

Dependent variable: natural logarithm of annual expenditures on modern drugs in hundreds of Independent variables Mali Francs

Household characteristics

Natural logarithm of household ..106 income in hundreds of Mali Francs (.616) Dummy if remittance income .640* (1.76) Dummy if household member attended .050 adult literacy classes (.122) Proportion of household members 2.27* attending school (1.85) Dummy if onchocerciasis .378 (767) Dummy if guinea worm .536 (.813) Dummy if leprosy 1.59** (2.16) Dummy if stomach ailment 1.39** (3.84) Dummy if other illness 1.89** (5.35) Proportion of household members sick .425 (.366) Service characteristics

Distance to nearest health facility -.0088 in kilometers (.466) Distance to nearest drug outlet -.021** in kilometers (2.09) Quality of nearest health facilitya/ -.929** (2.11) Quality of nearest drug outleta/ .067 . (.214) Dummy if nearest health facility and drug -1.41** * outlet are at same site (2.09) Dummy if household has own well .601 (1.46)

Constant 2.69 R2 .31 N 180

* Statistically significant at the .10 level. ** Statistically significant at the .05 level or better. a/ Quality indices are defined in the text. -47-

quality. Our implicit assumption is that drug prices are the same across villages.

The effect of household characteristics

Many of the variables representing household characteristics are significant in the regression of modern drug expenditure. Expenditure on modern drugs is not related to total income, but is related to the presence of remittance income, which is generally in cash. Households with remittance income tend.to have significantly higher expenditure on modern drugs than those without remittance income. Households with a higher proportion of members in school also tend to spend more on modern drugs.

The most highly significant results, however, are for dummy variables indicating .that a,household member had a,certain illness in the course of the year. Leprosy, stomach ailments, and other illnesses (including malaria, pneumonia and others) -are all positively related to drug expenditure at the .05 level of significance or better.

The effect of service characteristics

Among the service-related variables, distance seems to be the most important. The farther away is the nearest drug outlet, the lower is spending on modern drugs, as expected. Modern drug expenditure is not significantly affected by distance to a health facility. This is also expected, since drugs at health facilities are free (or not available), while drug outlets provide drugs for a fee.

A puzzling finding is the significant negative association between drug expenditures and the dummy variable for location of the drug outlet and health facility at the same site; it is possible that health - 48 -

posts in the larger villages (where there are also drug outlets) have

better stocks of free drugs.

The quality variables for health posts and pharmacies were based

on a number of characteristics of facilities. Since the service survey

found that there were virtually no drugs available at health posts, the

quality of health posts was based on the number and qualifications of

personnel. 1/ The quality scale ranged from 1 to 3. Posts with.a doctor or

university trained nurse were assigned the highest value of 3. Those with

two or more health staff, at least one of which was a nurse, were assigned

a value of 2. Facilities with one or fewer health staff were assigned-the

lowest value of 1. The index of quality of drug outlets was based on drug

availability at the nearest outlet -- specifically, the number of 11

.essential drugs 2 / and the total number of drugs in stock. The index ranges

from 1 (lowest quality) to 4 (highest quality).3 !

Modern drug expenditure is negatively correlated with the quality

of skills at the nearest health facility. The negative coefficient, which

is not expected, suggests that free drugs are more likely to be available

at facilities with higher qualified staff. In fact, health facilities with

the highest quality manpower did have more drugs in stock: an average of 32

1/ The quality of traditional treatment was assumed to be homogeneous.

2/ These include aspirin, anti-diarrhea drugs, anti-scabies medicine, antiseptic, auremycine 1 percent and 3 percent, chloroquine, cough medicine, iron, piperazine (or other anti-worm drugs) and sulphaguanidine (or other medicine for intestinal infections).

3/ There were six pharmacies that were nearest to the 38 villages. The pharmacy with only 3 of 11 essential drugs and a total of 16 drugs in stock received a quality index of 1; the three pharmacies with 6-8 of the 11 essential drugs and 17-30 total in stock received an index of 2; the pharmacy with 8 essential drugs and 40 total received in index of 3; and the one with all 11 essential drugs and 115 total in stock received an index of 4. -49-

drugs were in stock in facilities with the highest quality index (3), compared to less than 5 drugs in stock in facilities with indices of 2 or 1. The best quality manpower and the greatest number of drugs in stock were both in private facilities. Thus, drug expenditures are probably lower in households that are closest to higher quality health facilities because these also tended'to have free drugs in stock.

The coefficient on the quality of drug outlet variable is positive but not significant. The results for the distance and quality of drug outlet variables taken together imply that although drug expenditure tends to be somewhat higher when more drugs are available at the nearest outlet (but not significantly so), the decision to buy or not to buy drugs is more influenced by distance. Considering that the average village was 38 kilometers from the nearest outlet (58 kilometers.in Kenieba), drug procurement necessitated substantial extra out-of-pocket expenditure for transport.

The Choice of Provider

Sick people in the survey could have chosen four different sources of treatment: the modern system; the traditional system; both systems; or self-treatment. Table 4.2 shows the breakdown of reported 4 illnesses / and the type of treatment sought.

4/ These are the number of cases reported by household members in the 12 months preceding the survey. Since illnesses are self-reported, they may be incorrectly classified. And because of the long reference period, the number of illnesses is greatly underreported. - 50 -

Table 4.2: TYPE OF MEDICAL CONSULTATION BY DISEASE (Figures are number of cases)

Type of Consultation As a per- Modern Traditional Self cent Disease of all only only Both treatment Total illnesses

Abdominal diseases 35 33, 21 4 93 34 Malaria a/ 13 11 17 4 45 Onchocerciasis 16 13 9 10 3 35 Guinea worm' 13 - 1 16 1 0 18 7 Leprosy 3 3 7 1 14 Other diseases b/ 5 23 22 22 3 70 25 TOTAL 88 94 78 15 275 100 As a percent of 32 34 28 5 100 all consultations

a/ Includes malaria, fever, headaches and sore joints.

b/ Includes measles, epilepsy, hernia, tuberculosis, wounds, venereal disease, cough, meningitis and pneumonia.

Using the model of household demand outlined in Chapter 2, in

which morbidity is considered 5 to be random /, we estimated the effect of household and supply characteristics on the probability of four different outcomes: modern treatment; traditional treatment; both; self-treatment.

Each outcome is a discrete dependent variable with a probability, Pi, of occurring, as shown below.

5J Ideally, morbidity should be partly random and partly a function of prior health status, as measured by previous consumption of health care. The latter was not available from the data. The results of ordinary least square regressions of reported morbidity showed that the assumption that reported morbidity is random is valid here. Reported morbidity was negatively related to total income and earned income and positively related to remittance income (indicating perhaps some endogeneity between reported morbidity and remittance income). None of the other variables were statistically significant participation in adult literacy program, well in compound, however, and the R2 statistics were very low -- from .03 to .08. - 51 -

Dependent Variable:

Type of treatment chosen Probability of Choosing Health care i

1 modern P 1 2 traditional P2 3 both P3 4 self P4 where Z Pi = 1.

i= i

The results in Table 4.3 show the conditional probability (given an illness) of choosing modern over traditional care (column 1) and self-treatment over traditional care (column 2) for each independent

6 variable. / The influence of the independent variables is discussed below.

The effect of household characteristics

Household income does not significantly affect the choice of treatment; higher income households were not more likely to purchase modern health care over traditional. Similar results have been obtained by Heller

(1982) and Akin and others (1981, 1982).

Having some remittance income does significantly increase the probability of consulting modern over traditional care. The marginal propensity to consume modern services may differ for remittance income compared to total income, possibly because much of earned income in this population is in kind, while virtually all of remittance income is in cash. It is also possible that the amount of remittance income is endogenous to illness in the home -- that is, that remittances are sent to pay for modern treatment of family members.

6/ Similar regressions predicting choice of both over traditional and self over traditional, are shown in Birdsall and Chuhan, 1986. - 52 -

Table 4.3: MULTIPLE LOGIT RESULTS OF DEMAND FOR CURATIVE HEALTH SERVICESa/ (Figures in parentheses are asymptotic t-ratios.)

Type of Service Independent variables Modern vs. Self vs. Traditional Traditional

Household characteristics

Household income in hundreds of -.000025 .000007 Mali Frances (-1.07) (.258)

Dummy if income from remittances .774** 1.24* (2.28) (1.79) Dummy if well in compound .348 -.417 (.914) (-.507) Dummy if household member attended .448 1.11 adult literacy classes (1.10) (1.52)

Dummy for sex of sick individual -. 00348 .168 (1 = male, 0 = female) (-.010) (2.83)

Service characteristics

Distance to nearest health facility -.0364** -.0485 (-2.15) .(1.13) Distance to nearest drug outlet -.0145** .0103 (-2.41) (1.07) Quality of nearest health facility -1.12** .0146 (-2.68) (.0209) Quality of nearest drug outlet .729** 1.36** (2.39) (2.04)

Constant 1.08 -6.54

2-log likelihood ratio 54.5 54.5

N 259 259

* Significant at the .10 level. ** Significant at the .05 level or better. a/ Definitions, means and standard deviations for all variables are in Annex 4. - 53 -

Having a well in the compound and a person who has attended an

adult literacy class do not have a significant effect on treatment choice.

Nor does the pattern of demand for providers vary by the sex of the sick

individual.

The effect of service characteristics

The distance to both the nearest dispensary and the .nearest drug

outlet have a negative and statistically significant effect on the likeli-

hood of choosing modern treatment. The farther away are a'.dispensary and

outlet, the higher the probability of traditional treatment. These results

support the contention that traditional and modern medical care are viewed

as substitutes by consumers, and the choice between them governed in part

by their relative costs.

The quality of the nearest drug-outlet exerts a significant

positive influence on the choice of modern over traditional treatment and

the choice of self-treatment over traditional treatment. The quality of

health posts -- measured by the skills of providers -- reduces the prob-

ability of a modern consultation. Overall the results suggest the over- whelming importance of drugs to consumers. The quality of health post

staff may be irrelevant to consumers if there are no drugs available. If

drugs are available, then irrespective of whether dispensaries have highly

trained staff or not, the demand for modern care and self-treatment is higher. -54-

Policy implications

The analysis has shown the overriding importance of the distance and drug availability ("quality of drug outlet") variables in constraining the demand for modern over traditional care. Drugs are free at health centers, but when they are unavailable -- most of the time -- households are willing to travel large distances and pay high fees for modern drugs,

We cannot know the effect of the price of treatment on demand, but unlike the case of schooling the user fees for modern treatment, once drugs are included, were substantial.

The most obvious conclusion here is that if modern dispensaries were adequately supplied with free drugs, as official policy advocates, demand for modern care would greatly increase -- both because of a dramatic reduction in the cost of drugs but also because households are closer to dispensaries than to drug outlets. However, adequate supply of free drugs has never been achieved, and the 'probability that the Ministry of Health will be financially able to provide free drugs regularly to all public dispensaries is very low. This is particularly true given that the

Pharmacie Populaire, which distributes the drugs at a charge, is a government parastatal, and has been one of the few parastatals to show a

profit in recent years.

A second, more feasible option would be to charge fees for drugs

at dispensaries. The results show that demand for modern treatment would

increase even if drugs were supplied at dispensaries for the same high

prices charged by the Pharmacie Populaire. In fact, it would not be

necessary to charge such high prices to recover costs. The Ministry of

Health is not profit-making, for one thing. And many economies could be

had by using generic drugs with less elaborate packaging. This policy - 55 -

would lower the transport and drug purchase costs to consumers and ensure wider drug availability at dispensaries.

Two practical objections are commonly raised against user charges in public health facilities -- that fees lead to pilfering and petty corruption and to overprescription of drugs. Pilfering occurs more as a function of scarcity than charges, however, and may explain the current lack of drugs on the shelves of public health facilities. Regarding petty corruption, it would be difficult to monitor compliance with official drug pricing in remote areas. On the other hand, the existence of an alternative source of drugs -- the Pharmacie Populaire -- assures that government staff would have difficulty charging more than is already being paid by consumers. Given that distances would still be reduced, consumers'. would benefi.t (even assuming some corruption). The problem of overprescription of drugs occurs primarily where the drug provider also is the diagnostician, as in pharmacies whenever a prescription is not already in hand. It is not great where the diagnostician's own income is not linked to drug sales, as it is not in public health facilities.

A third option would be to keep separate the providers of diagnostic services and of drugs, as is currently the case, but reduce the distance to and price of drugs by selling them in village pharmacies or outlets sponsored by cooperatives, such as the FGR pharmacies. This would reduce the likelihood of overprescription and corruption by the medical practitioner, although price and fiscal controls would still have to be organized at the village level. Chapter 5. Ability and Willingness to Pay for Health and Water Projects

The household survey of Bafoulabe, Kenieba and Kita was

originally undertaken to evaluate the feasibility of village-level cost

recovery for the proposed health and water supply projects. While earlier

chapters looked at the demand for existing services, this chapter deals

with the demand for hypothetical services that had not previously been

offered in the villages. The chapter addresses the demand for the services

offered by the projects and the feasibility of village-level cost recovery,

specifically:

o Can rural villagers collectively or individually afford these

services?

* How much would they be willing to pay for the services?

* What accounts for the variation in willingness to pay?

* Does the organizational capacity exist at the village level to

implement such a cost recovery scheme, that is, to collect and

manage the funds thus mobilized?

Description and costs of the proposed projects

The water supply project proposed to install tubewells with hand-operated pumps. A member of the village would be trained to maintain

the pumps and perform minor repairs. Each village would finance a portion of the drilling costs, remuneration in cash or in kind of the pump caretaker, spare parts, and reimbursement to outside authorities for emergency repairs beyond the capabilities of the caretaker. These expenses - 57 -

are summarized in Table 5.1. The village contribution to the investment --

270,000 MF, or about $500 -- is only 2.5 percent of the average installation cost per productive equipped borehole of $20,000. The recurrent contribution of villages -- 62,500 MF, including remuneration of the pump caretaker -- would represent about 65 percent of the estimated recurrent cost per well per year. Each tubewell can serve a maximum of 500 persons. But since the the villages surveyed had about 800 persons each, the "typical" village in the sample would need two wells, with 400 persons supporting each. -Under the assumption of one well per 400 persons, villages would have to pay to 675 MF per capita for well installation and

156 MF per capita annually for maintenance.

At the time that the household survey was conducted, the health project was going to train one or more literate persons selected by the village to provide first aid, sanitation and preventive care. The salary of the health worker(s) would be entirely financed by the village. It is estimated that the combined services of all health workers in a village would amount to the equivalent of one person working 20 hours a week over a year. We use an estimated yearly cost of 65,000 MF, about one-half the average income of those working. (Workers probably put in more than 40 hours a week, but few were literate.) In an "average" village of <00 persons, the cost of the health worker would amount to 81 MF per capita.

Villagers would also be expected to pay directly for medicines dispensed, but since this is already the case, we do not include these as new costs that must be recovered.

The total recurrent costs to be paid by the villages per capita for the two projects amount to 237 MF, or about $.45, per year in a typical village of 800 people. Depending on the cercle, the investment cost to be - 58 -

Table 5.1: AMOUNTS TO BE PAID BY VILLAGES FOR THE WATER SUPPLY AND HEALTH PROJECTS (MFa/)

Amount to be paid Per Type of payment Total capitab/

Water supply project

Investment (per tubewell)c/ 270,000 675

One third of the purchase price of the pump 220,000 Ten bags of cement 50,000

Recurrent (per tubewell per year) 62,500 156

Spare parts 15,000 Reimbursement for emergency repair from outside village 11,500 Remuneration of pump caretakerd/ 36,000

Health project

Remuneration of health workerd/ 65,000 81

Total recurrent payments, both projects b/ 190,000 237

a/ 1981 exchange rate US$1.00 = 543 MF. b/ For a typical village surveyed with 800 persons and two tubewells.

c/ This is the part of the one-time construction costs to be paid by the villages; it represents only 2.5 percent of the total cost of drilling and fully equipping one water point. Although villages are asked to finance only one-third of the purchase price of the pump at the outset (as an inducement to participate in the project), they are expected to fully finance pump replacement in the future (about 660,000 MF in 1981 prices every six years). The amounts cited here, therefore, apply only to the first 6 years of project operation.

d/ Estimated value, to be paid in cash or in kind; amount and nature of remuneration to be determined by each village. - 59 -

paid per household ranges from 7700-10,400 MF and the combined recurrent costs to to be paid for both projects amount to 2700-3700 MF per household per year.

Household ability to pay

Although remuneration of the pump caretaker and village health worker may be in cash or in kind, a number of village-financed components of the water project require cash: the investment costs; spare parts; reimbursement to arrondissement and cercle-level authorities for emergency assistance. In fact, when asked in what form these projects should be financed, 83 percent of respondents preferred cash payments. In assessing ability-to-pay, therefore, it is important to know: first, whether households have any major source of cash income; second, how reliable the cash income from these sources is likely to be; and third, how much cash is available for'meeting project costs.

Cash income. Households in Bafoulabe and Kenieba received a large share of total income in cash. Cash remittances accounted for 43 percent of total household income in Bafoulabe, while income from gold

prospecting, remittances and other cash-earning activities amounted to over

half of total income in Kenieba (see Table 1.1). Only about one fifth of

crop income in Bafoulabe and Kenieba was from sale of crops; most

agricultural income was in kind. Households in Kita derived only 10

percent of income from remittances and other non-agricultural cash-earning

activities. Three quarters of income was from crop production; roughly

half of crop income was earned from sale of groundnuts while the remainder

was in kind. Thus, about 45-55 percent of household income in the three

cercles was in cash. - 60 -

Cash income was subject to seasonal and annual fluctuations in

Kita. Income from groundnut cultivation is perhaps the most unstable cash source, as it is subject to the vagaries of rainfall, temperature and pests. Further, income from sale of groundnuts is likely to occur immediately after harvest, meaning that in the absence of credit markets cash availability throughout the rest of the year may be quite low. Income from remittances may be subject to similar fluctuations to the extent that the money is remitted from agricultural labor in neighboring African countries. 1 / Gold prospecting is a year-round source of cash income in

Kenieba although it likely falls off somewhat in periods of high demand for agricultural labor. Since gold prospecting is also reliant on chance, however, ,the stability of this source of cash is doubtful.

Thus, the households surveyed appeared to have important sources of cash income, but because the sources were tied to agriculture and'credit markets were poorly developed, cash availability in Kita and possibly in

Bafoulabe may peak at harvest and be subject to considerable annual variation.

Expenditure. Table 5.2 shows selected expenditures by households for the 12 months preceding the survey. 2 / The households surveyed spent about 48,000 MF per capita, or roughly US$90 at 1981 exchange rates.

I/ The proportion of remittances derived from agriculture is not known. In Bafoulabe, however, 30 percent of absent household members were living in other African countries, 28 percent were residing in France, and 39 percent were elsewhere in Mali. Only about one third of those absent were engaged in commerce or the civil service.

2/ The expenditure data collected were not exhaustive. Food expenditures, for example, were not included. Quantity data on food production and food consumption was collected, however, allowing an estimate of expenditures on food gains. See Note c, Table 5.2. - 61 -

Table 5.2: HOUSEHOLD EXPENDITURES, 1980-81 (Thousands of Mali Francs, MF)

Expenditure Bafoulabd Kenieba Kita Total

Agricultural inputs 17.2 21.7 16.3 18.2 Cattle purchase 2.9 5.7 0.9 3.0 Celebrations 36.5 143.2 21.6 61.9 Childbirth and baptism 4.7 3.3 2.9 3.6 Clothing 10.3 18.9 12.8 13.7 Community projectsb/ 10.5 5.9 12.1 9.8 Drugs (modern and 13.7 16.7 .23.2 18.2 traditional) Durable goodsa/ 36.6 46.4 30.9 37.4 Feasts 11.8 4.6 10.6 9.2 Gifts 1.2 1.9 3.9 2.4 Loans to others 23.6 3.7 37.6 23.1 Marriage 28.9 69.7 136.4 81.2 Taxes 19.2 15.8 32.2 23.1 Water supply (well 6.6 5.4 9.0 7.2 maintenance & water containers)

Value of grain purchasedc/ 309.2 254.4 352.8 309.7

Total expenditure 532.9 617.3 703.2 621.7

Persons per household 11.58 11.46 15.41 12.99

Per capita expenditure 46.0 53.9 45.6 47.9

Note: Grain as a percent of total 58.0% 41.2% 50.2% 49.8% a/ Moped, radio, bicycle, gun, lantern, flashlight, house with corrugated steel roof. b/ School, mosque, dispensary construction.

C/ Itemized food expenditures for the ye,- were not collected; annual expenditure on subsistence grain was estimated by comparing annual household consumption and production figures, and multiplying the production deficit (i.e., the quantity presumed purchased) by the retail price of subsistence grain. - 62 -

Purchase of food grains probably accounted for about 50 percent of total expenditure.3 / This proportion may seem low, since the poorest households in some countries spend up to 80 percent of total expenditures

on food. Only estimated expenditure on grains is included here, however;

inclusion of expenditure on other -foods would raise the proportion of food

in total expenditure. Also, households produced a substantial amount of

their food. The total value of home grown and purchased food is probably a

substantially higher proportion of income. This also implies, however,

that expenditures on food grain are very sensitive to climate, as families

must buy additional grain to compensate for their low yields during poor

agricultural years.

Somewhat surprising and indicative of an ability to pay for the

health and water projects are the large amounts spent on social activities

(community projects, feasts, celebrations, marriages, gifts), durable goods

(such as radios) and loans to others. These expenditures collectively

amounted to 28 percent of household expenditures in Bafoulabe', 45 percent

in Kenieba and 36 percent in Kita, or from 13,000-24,000 MF per capita.

Households spent 4340 MF per capita on durable goods, community projects

and feasts in 1980-81, while the amount to be paid per capita for the

investment and recurrent costs for the projects amount to only 675 MF and

237 MF, respectively. Per capita expenditure on drugs (1,571 MF) was 19

times the estimated per capita amount to be paid for the village health

worker. The amounts to be paid for the projects appear to be within the

means of the households surveyed.

2/ Estimated expenditure on food grain. See note c in Table 5.2. - 63 -

WillipViess to pay

The willingness of households to pay for a new service can be

measured indirectly, using current expenditures on similar services as a

proxy for deAand, or by asking respondents directly what they would be

willing to pay for the new service. The problem with-the indirect,

expenditure approach is that if the service has not existed before, the

expenditure item chosen as a proxy may not provide much guidance on demand

for the new service. The direct, or "contingent valuation", approach

is thus more appropriate for a hypothetical service, such as was the case

for the proposed projects. It'has been used widely as a method to elicit

preference functions for public goods such as better air quality or wildlife preserves in.developed economies4 / and, very recently, to estimate willingness to, pay for housing services in developing economies. 5 / The

Mali household survey asked respondents directly how much they would be willing to pay for proposed health and water projects.

The contingent valuatipn method is, however, subject to two types of response bias: hypothetic bias -- that respondents' answers will be meaningless because the market described to them is not real; and, of greater concern, strategic bias -- that respondents might understate their willingness-to-pay in an attempt to reduce their own payments, 6! or that

4/ See, for example, Freeman (1979)il. Randall, Hoehn and Tolley (1982) provide a useful summary 'of the theoretical issues and of experiments in developed countries.

5/ Follain and Jimenez (1983). For A discussion of application of contingent valuation in developing cointries, see Mitchell (1982).

6/ This notion was suggested by Samuelson (1954). For a report of an experiment that showed that free riding is a factor, but with only a modest effect, see Schneider and Pommerehne (1981). Kurz (1974) also reports on an experiment. -64-

they exaggerate their own bid to move the sample mean in their preferred

direction.

Experiments and validity tests have indicated, however, that

contingent valuation, when carefully carried out, yields sensible results

in valuing public goods. For example, the expected relationship between

individual bids and income has been found. Travel cost models and hedonic

rent equations have been used in the same samples to estimate implicit

willingness-to-pay by an alternative method, and have generally yielded

comparable results. The frequency of "protest" bids -- bids of zero or no

response -- has varied from 10 to 50 percent in various surveys, suggesting

that the effort made to explain the structure of the contingent market is

important to the quality of-willingness-to-pay.data.7 !

In analyzing the willingness-to-pay data from the Mali survey,

two considerations must be borne in mind. First, the responses were

elicited using only two direct questions on amounts in cash and in kind

that respondents would pay; there was no systematic attempt during the

interviews to describe the service beingasked about or.to probe on willingness to pay using the conventional bidding format.8 / On the one

hand, this suggests hypothetic bias could be a problem. On the other hand,

7/ See Mitchell and Carson (1982).

8/ The questions for water supply were: "Does it seem to you that this village needs a well with a pump? If so, this well would entail maintenance costs. Would you be willing to pay for well maintenance each year? How much would you be willing to pay, and in what form?" The description of the health project on the questionnaire said: "For medical care, it is under consideration to train a-member of the village to provide first aid. But this person will be paid for by yourselves." Respondents were asked the background characteristics they preferred for such a person (sex, literacy), then: "How do you think that this expense should be handled?" If in cash, "How much are you ready to contribute per year?" -65-

we know that the purpose of the survey and the nature of the proposed

services were explained to groups of villagers in each village prior to the

interviews. Thus it is likely that respondents had a reasonably clear idea

of the services being asked about, and that they did not view the situation

as hypothetical.

The fact that these discussions took place, however, does suggest

the possibility of strategic.bias. Respondents are likely to have

understated their willingness to pay to the extent that they assumed the

services would in fact be installed and believed they would have to pay the,

amount they stated or an amount based on their and other respondents'

statements. Strategic bias is also likely because community services,

rather than public goods are under consideration here. In contrast to

public goods, such as air quality, it is easier to see who is benefitting

from community services and to see that consumption by one party precludes

consumption by others. As a result, it is easier to enforce payment for

community services.

Table 5.3 shows the average amounts respondents said they would

be willing to pay toward maintenance of a village well and support of a village health worker. Several points are worth noting. First, the

average willingness to pay for the tubewell is almost one and a half times

that for the health worker. This is consistent with the reports of

fieldworkers that villagers were much more interested in improving their water supply than in either better health or education services. Recall also that the villages surveyed were selected from among those with a problem of water scarcity. Respondents may not have had a clear idea of

the services a health worker would provide. Even if they did have a clear idea, they may not have been particularly interested in such services (in - 66 -

contrast to a village tubewell), since much of such a worker's duties would be in the realm of preventive care, the demand for which is not great in many populations. The health worker would be equipped to handle only minor illnesses; virtually all serious medical problems iould be referred to other existing facilities.

Second, at prevailing levels of per capita willingness to pay for well maintenance (126 MF), a village would have to have at least 496 persons to support recurrent payments.9 / This means that only 25 of the 38 villages could support the recurrent payments of well maintenance. The lower average willingness to pay for a health worker (81 MF per capita) means that only 14 of the villages surveyed had sufficient population to support one.

Table 5.3: WILLINGNESS TO PAY FOR WATER AND HEALTH PROJECTS BY CERCLE (MF)a/

Willingness to pay for.... Bafoulabe Kenieba Kita Total

Water supply Per household 2349 973 1466 1626 Per capita 203 85 95 126

Health worker Per household 1757 385 1089 1104 Per capita 152 36 71 85 a/ Includes "protest" bids of zero (8 percent of households for water supply, 15 percent for health worker); excludes 3 households for water and 1 for health where willingness to pay exceeded 30,000 MF, and 1 for health where willingness to pay as a proportion of income was very high.

9/ This is almost precisely the number of people that one well can effectively support (500). Note that the survey question referred only to the amount respondents would be willing to pay for well maintenance; the amount they would contribute to well construction was not asked. - 67 -

Finally, there was a great deal of variation in the

willingness-to-pay across the three cercles. This variation is partly due

to differences in income and in access to alternative health services,

analyzed below. It is also possible that the variation arises because of systematic differences in the way the questions on willingness to pay were

handled, as the teams'in each cercle were led by three different

supervisors. Dummy variables representing Kenieba and Kita (with Bafoulabe

the base category) are included in the regression analysis below to .control

for this possibility.

Determinants of demand

An important conclusion arising from earlier chapters is that demand for a service is a function of the nature of the service. Thus, one of the possible reasons accounting for somewhat low willingness to pay for the projects -- especially the health project -- was the way in which they were described. Had the service been described differently -- for example, as maintenance or initial purchase costs for a village pharmacy -- willingness to pay might have been much greater.

Unfortunately, the willingness-to-pay questions were asked only about the two specific services described earlier. However, we can evaluate the importance of the quality and distance of the existing, competing services in determinir' the willingness to pay for the proposed new services.

Tables 5.4 and 5.5 show the results of ordinary least squares regressions of willingness to pay for village tube wells and health workers, respectively.LO/ The dependent variable in both regressions is

10/ The means and standard deviations of all variables used in the analysis are shown in Annex 4. - 68 -

Table 5.4: WILLINGNESS TO PAY FOR VILLAGE WELL MAINTENANCEa/ (Ordinary-least-squares estimates, t-statistics in parentheses)

Dependent Variable: Natural Independent Variables logarithm of willingness to pay for village well maintenance

Natural logarithm of household .366** income (4.85)

Dummy if remittance income -.035. (.207)

Dummy if household member attended -.038 adult literacy class (.195)

Dummy if onchocerciasis . .169 (.756)

Dummy if guinea worm .641** (1.97)

Dummy if leprosy -.297 ( (.872)

Dummy if stomach ailment .216 (1.29)

Dummy if other illness .265* (1.66)

Dummy if household has own well .273 (1.42)

Distance to year-round water .00013** * source (meters) (2.22)

Dummy: Kenieba -.809** (3.28)

Dummy: Kita .720** (3.61)

Constant -1.31

R2 .29

N 179

* Statistically significant at the .10 level. ** Statistically significant at the .05 level or better. a/ For variable definitions, means and standard deviations, see Annex 4. - 69 -

the natural logarithm of willingness to pay; this differs from regressions

in earlier chapters that used "use" as a dependent variable. Willingness

to pay is similar to a hypothetical expenditure with price and level of use

inherent. "Price" of the proposed services cannot be included among the

independent variables.

Willingness to pay for the water project is positively related to

total household income, and this finding is statistically significant

(Table 5.4). Willingness to pay is not related to household participation

in adult literacy classes. Among the dummy variables for morbidity of

household members in the last year, those for water borne diseases --

guinea worm, stomach ailments, and other illness -- have a positive

significant effect on willingness to pay for village well maintenance.

Having one's own well does not negatively affect willingness to pay

for the water project; this is not surprising since 90 percent of these

home wells are dry for some period of the year. Distance to a year-round

water source does matter; the farther a household is, the more it is

willing to support a village well. The dummy variables for Kita and

Kenieba are included to account for differences in rainfall and hydrology

among the cercles that affect the availability of water.

Table 5.5 shows the regression results for willingness to pay for the health worker. In contrast to the results for well maintenance, willingness to pay for a health worker is not significantly related to

total income but is related to remittance income, or nonearned cash in- come. Willingness to pay for a health worker is also positively related to incidence of leprosy and other illnesses Jc. the household. (The latter includes malaria, meningitis, tuberculosis, cough, and wound, among others.) Neither of the household schooling variables is significant. - 70 -

Table 5.5: WILLINGNESS TO PAY FOR VILLAGE HEALTH WORKERa/ (Ordinary-least-squares estimates, t-statistics in parentheses)

Dependent Variable: Natural loga- rithm of willingness to pay for Independent Variable village health worker in hundreds Mali Francs

Household characteristics

Natural logarithm of household income .107 in hundreds of Mali Francs (1.43) Dummy if remittance income .40** (2.54) Dummy if household member has,attended .21 adult literacy classes (1.20) Proportion of household members attending -.476 school (.893) Dummy if onchocerciasis -.014 (.071) Dummy if guinea worm -.0063 (0) Dummy if leprosy .581* (1.83) Dummy if stomach ailment - -.086 (.549) Dummy if other illness .306** (2.0) Proportion of household members sick -.324 (.646)

Service characteristics

Distance to nearest health facility .011 (1.39) Distance to nearest drug outlet -.016** (3.58) Quality of nearest health facility -.587** (3.08) Quality of nearest drug outletb/ -.245* (1.86) Dummy if health facility and drug -.571** outlet at common site (1.96) Dummy if household has own well .077 (.430)

Constant 3.28

R2 .25

N 181

* Statistically 'significant at the .10 level. ** Statistically significant at the .05 level or better. a/ For variable definitions, means and standard deviations, see Annex 4. b/ The quality indices are defined in Chapter 4. - 71 -

Most important, however, is that the characteristics of existing

services are highly significant determinants of willingness to pay for a

health worker. The quality of the nearest drug outlet and health facility

are negatively related to willingness to pay. The better is the quality of

the nearest facilities, the less households are willing to pay for a

community health worker.

Furthermore, a dummy variable indicating that the drug outlet and

health facility were located at the same site indicates that a common

location is also negatively. related to willingness to pay. This variable

was included because effective treatment often requires both a diagnosis at

a health post, and given that drugs are not usually available at the health

post, a visit to a Pharmacie Populaire with a prescription. If the

facilities are in the same location, only one trip is required. The result

for the dummy variable, therefore, is as expected -- when the* drug outlet

and health facility are located together, willingness to pay.for a related

service in one's own community is lower. The presence of this variable may

also explain the anomalous negative effect, noted above, of distance to the nearest drug outlet.

In general, these results of the willingness-to-pay analysis are consistent with the results of the analyses of use of existing services in

Chapters 3 and 4. The "cost" variables (distance, quality) affect actual behavior and willingness to pay for a hypothetical service in the expected manner.

Organizational Capacity of Villages for Cost Recovery

The feasibility of recovering costs from the health and water projects depends not only on the willingess of households to pay, but on the capacity at the village level to collect and manage these funds. The - 72 -

water supply and health projects specified the types of costs to be recovered at the village level, but not the finance mechanisms to be utilized. The water supply project, for example, proposed to enter into a contract with a village committee. The contract would specify which services would be financed by the village and which would be provided by the project. It would be left to the discretion of the committee, chief, or other authority to determine:

how the various components (e.g., salaries, spare parts) would be

financed: collectively or per use, such as fee for service or

payment for drug sales;

how payments would be assessed; per household, per person or per

use, in cash or in kind;

whether certain persons or households would be exempted;

how and when money would be collected: annually, monthly,

periodically, or per use;

who would manage, collect and disburse funds; and

how compliance would be enforced.

Data from the household and community surveys suggest that these villages had some experience in financing investment costs for community projects. Half of the households surveyed in Bafoulabe, two thirds of those in Kenieba and about one fourth in Kita reported cash expenditures for construction of schools, dispensaries or mosques in 1980-81. Further, of the 21 primary schools serving these households, 19 had been built with community assistance and for 15 the assistance was partly in cash.

Forty-five percent of households preferred that the proposed health worker be financed by community organizations. - 73 -

Thirty of the 38 villages had a total of 58 organizations with a treasury; 8 villages had no such groups. Village organizations were of both modern and traditional types. The two major types of traditional organizations were tons and classes d'age. Briefly, tons are composed of the young people within a village, roughly between 15 and 35 years of age, and headed by a member of the chief's household. They hire out their labor to individuals in the community for which they typically receive payment in kind -- food during the work period and perhaps a sheep or head of cattle.

This, in addition to any cash payments, comprises.their "treasury". The ton may also donate its labor to community projects, such as school construction. Classes d'age are groups of young people who were initiated

(circumcized) at roughly the same date. They are subgroups within the ton that may also offer their services independently and maintain their own accounts. 1 1 /

Modern organizations in the villages included: parent associations (associations des parents d'eleves), all linked to schools the villages; branches of the political party, to which all households must contribute; and Federations de groupements ruraux (FGR), rural consumer cooperatives.

Despite the existence of treasuries for these organizations, the villagers themselves had very little experience in collecting, managing or disbursing cash funds for community services. The modern organizations generally collected cash, but with the exception of the FGRs, funds were

11/ Traditional organizations are discussed in greater detail in Republique du Mali, SNED (1982). This report gives examples of prices charged by tons, both in cash and in kind. Survey data indicate that most are paid in kind, however. -74-

collected and managed by outside authorities. And respondents cited

problems of shortfalls in funds, mismanagement and corruption in these

organizations. Traditional organizations were controlled from within the

village, but .their "treasuries" were actually receipts of payment in kind

for labor provided by the group to individual households -- not cash

transactions for community-wide services. Few problems were reported for

traditional organizations, but respondents no doubt understated problems with those organizations for which they were responsible. Thus, with the exception of the three villages with FGRs, the villagers had little experience in regular community-wide cash collections or in managing cash funds. And the record for FGRs was spotty: all three had management problems and two wer short of cash. In a fourth village the FGR had

completely disbanded.

Conclusions

It appears that the households surveyed did have significant sources of cash income and that the contributions envisaged by the projects were within the means -of the average household. Households had a higher demand for tubewells than for a health worker, based on reported willingness to pay. At prevailing levels of willingness to pay, two thirds of the villages could support the maintenance of a tubewell but fewer than half could pay for a health worker.

The distance to existing health and water services was important in explaining differences between households in willingness to pay. The precise nature of the proposed services would also presumably play a large role. The survey did not explore the demand or willingness to pay for - 75 -

several different types of proposed services, however. Lack of precision

in the description of the health worker's job may account for low

willingness to pay; the service actually described was clearly in low

demand.

The villages surveyed had some experience with financing the investment costs of local projects, but little, if any, in financing

recurrent costs for collective services. Projects in*other parts of Mali using the "village contract" approach are experiencing conditional success, but 1 2 have been operating only a short time. / Further, these projects have often been associated with other types of services in villages which are less remote than most villages in the area surveyed. Projects elsewhere which rely on local finance of village health workers have encountered problems, but it is not clear to what extent they can be attributed to inadequate finance mechanisms, rather than low willingness to pay for the services provided.13/

All of this points up the importance of thoroughly exploring service and finance alternatives with village authorities to ensure that there is ample demand for the service and that the finance method chosen is

12/ HELVETAS and UNDP both have village-financed water supply projects in Mali, the former located in the Mali-suc project zone. Village finance is also under consideration in Burkina Faso. For problems encountered in a similar scheme in Lesotho, see Feachem and others (1978).

13/ A recent review of AID-assisted health projects provides numerous examples of village health worker finance, both successful and unsuccessful. Village finance of salaries seems to encounter greater difficulty than schemes which finance health workers through fee for services or drug sales. See Favin (1981). - 76 -

viable and accepted by those who will use the service. It cannot simply be assumed that by delegating responsibility for recurrent finance to villages

appropriate and viable structures will appear where they previously never existed, particularly in a zone with such low literacy and where

record-keeping and accounting are virtually unknown. Chapter 6. Nqg,luslon

The question posed at the outse w44 whether, given the limited

financial resources of some governments for ,inance of subsidized or

"free" social services, the.te is gete' for introducing or raising user

fees without reducing use, particularly amoni'the neediest groups.

Specifically, we asked whether the negativ effect of higher fees on use would be more than compeiiysated for by the positive effect of better quality services at a closer distance. These questions were asked with reference to a very poor region of Western Mali where the use of existing social services was low and there appeared to be no excess demand for them.

The analyses presented here have highlighted the importance of service-related variables in influencing the use of schooling, health, and water supply services.

Distance to the service is a consistently significant

det minant of use. Greater distance is associated with

lower use of schooling and health care, lower drug

expenditure, and higher willingness to pay for village wells

and health woekers. Greater distance to a modern facility

also increases the probability of consulting a traditional

healer in the village.

o The quality of services is also an important correlate of

use. School quality,--as measured by class size and the

number of textbooks--is associated with higher enrollments.

Households with access to higher quality drug outlets are - 78 -

more likely to choose modern care or self-treatment over

traditional treatment, and are less willing to pay for a

health worker.

The effect of user fees on demand--which could only be measured

for schooling--is negative, as expected. However, to the extent that

school fees are used to improve quality and reduce distance--both of

which had positive effects--they may not affect demand and conceivably

could raise it.

In the case of health care, the distance to parastatal drug

outlets is great and the fees charged are .already high. If the drugs

were provided at closer public health outlets for the same high fee,

demand would jump. In fact, public facilities need not charge such high

fees. Introduction of user fees for drugs in public outlets would -

increase use of services by reducing both distance and the user fee from

the perspective of households.

In the case of water supply, households in the majority of villages are able and willing to finance well maintenance. It is not

apparent whether local finance of the proposed projects would take the

form of a user fee or a per household contribution. Households are less willing to pay for a health worker. This might be due to methodological problems in the conduct of the survey, or simply to the possibility that

the service described doec not meet their perceived needs.

It is important to recall that these results relied on certain conditions that may not hold in other countries or other parts of Mali - 79 -

where incomes are higher, the road network better, and services closer to

households and of better quality. The three key pieces of information

for such an analysis are:

0 the elasticity of demand with respect to the quality and

distance of services;

o the elasticity of demand with respect to a fee; and

o the cost of reducing distance or improving service quality.

A critical caveat is that the fees collected be used to improve the services of those who pay the fees, and not simply to bolster general funding of the sector at the center. To ensure that this is the case, local control over the disposition of fee revenue is necessary. Given the limited experience of many villages and public facilities in collecting and managing fees, institutional development will often be a necessary prerequisite for local cost recovery schemes. EPILOGUE

The final design of the water supply project alled for drilling about 325 village wells in Kita cercle and wells at each of the medical facilities in Bafoulabe and Kenieba cercles that are to be rebuilt or renovated as part of the health project. Kita cercle was chosen for the village well program primarily because of better roads and easier access to villages. If successful, the village well program will eventually be extended to the other two cercles. Participating villages enter into a contract with the project, agreeing to pay for part of the installation and recurrent maintenance costs (see Chapter 5).

The project was approved,in early 1984. One hundred wells have been drilled, of which 80 were successful. This is a higher success rate than predicted. As a result, the project may be able to produce half again as many productive wells as was planned. Further, the wells are producing twice as much water as predicted, implying that a single well can satisfy the needs of a larger village and that there may be sufficient water to use for agricultural purposes in some villages. Unfortunately, the project encountered an eight-month delay in procuring pumps for the productive boreholes. The first pumps were installed in October 1984.

None of these developments have affected the payments expected of villages. All of the villages with productive wells have presumably made

the initial payment, as this was to be a prerequisite to drilling. The

effectiveness of village arrangements for financing maintenance costs will be evaluated in May 1986.

The health development project was declared effective in May

1984. It consisted of both national and regional components, including: -79 &-

improved training of medical and paramedical personnel; better financial management of the Pharmacie Populaire; improved pharmaceutical planning and control; construction and renovation of medical facilities in Bafoulabe/,

Kenieba and Kita; and health education in villages of these three cercles.

The project will-provide training for village health workers in villages that indicate an interest and are willing to finance worker salaries. In a regional experiment, fees will be introduced for drugs and possibly for inpatient care and out-patient consultations in public facilities in Bafoulabe, Kenieba and Kita cercles. The experience of cost recovery in this region will guide national implementation of a similar policy. At the national level, measures have already been taken to establish an essential drug list, exempt these drugs from heavy import

taxes, and develop a protocol of standard treatments. The introduction of user fees should reduce the costs of using health care in the Kayes region,

according to the results of our research in the area. Neither the village health worker nor the user fee schemes have been fully implemented,

however. Their impAx-t awaits future analysis. Annex 1 -80- Page 1 of 9

Annex 1: Summary of the Mali Surveys

Background

In 1981 the Government of Mali commissioned a socioeconomic survey of households in three contiguous administrative districts, or cercles, in the Kayes .region of southwestern Mali: Bafoulabe, Kenieba and

Kita. The survey was commissioned to provide the Government with information useful in the design of health and water supply projects to be financed by the World Bank. The household survey, conducted by the Societe

Nationale d'Etudes pour le Developpement (SNED), 1/ had many goals, including examination of current health and water practices, the type and availability.of water supply, and the priorities of the population vis-a-vis health care. Chief among the concerns of project planners, however, was the ability and willingness of villagers to finance atleast part of the recurrent costs arising from these projects, given the likelihood of limited availability of long-term funding from the central government, An epidemiological survey of Kenieba, Bafoulabe and Kita was also conducted by the Bamako Medical School to provide additional information for design of the health project. 2 !

In*October 1981 a research proposal was submitted to the World

Bank to permit a more detailed study of the demand for and willingness to

1/ A research group associated with the Malian Government.

2/ Ecole Nationale de Medecine et de Pharmacie du Mali, "Evaluation Sanitaire des cercles de Kenieba, Bafoulabe, Kita", Rapport preliminaire, mai 1981. Annex 1 Page 2 of 9 - 81 -

pay for health and schooling by supplementing data from the household survey with information on the availability, quality and price of services for the villages surveyed. In 1982, Malian investigators returned to the

38 villages that participated in the household survey to collect this information.

Sample Design

The 1981 household survey reached 186 households in 38 villages in the three cercles of Bafoulabe, Kenieba and Kita (see Table 1). The community survey was conducted in these same villages nine months later using interviews with male and female respondent groups; employees of the nearest health and schooling facilities to each village were also interviewed.

Table 1: SAMPLE DESCRIPTION

Bafoulabe Kenieba Kita Total

Villages 13 10 15 38 Households 62 54 70 186 Household size 11.58 11.46 15.41 12.99

Selection of Villages

Since the goal of the Bank projects was improvement of water and health, survey villages were selected from a list of villages with high priority for well construction provided by the local Service Hydraulique. Annex 1 -82- Page 3 of 9

Four types of villages were chosen from this list: villages visited by the epidemiological survey; those which had been involved with

Mali's functional literacy project; those which had been involved with the

Operation Arachides et Cultures Vivri res (OACV), an agricultural extension service concerned with groundnut cultivation; and other villages. A total of 38 villages were chosen, distributed among the three cercles in proportion to the total number of villages in each: Bafoulabe, 13; Kenieba,

10; Kita, 15.

Selection of Respondents

Household Survey . The household in the survey was defined by the unit of production. In rural Mali, one typically finds an extended family, consisting of the head (the oldest living member), his wives, sons and their families, residing in an enclosed or closely grouped cluster of huts, called a "compound". Depending on the size of the compound, members may eat and prepare food together or in smaller family groups. Within a compound most production occurs on one or more separate "plots" cultivated collectively by smaller family units within the extended family. Family members may also individually cultivate their own private fields. The collective plot, or exploitation, was chosen to define the household.

Roughly 4-5 households were randomly selected in each village for

3 the survey. / The main respondent was the head of household, although other members were allowed to enter into discussions to improve the accuracy of the data. Of the 186 households surveyed, almost all (184) were headed by males.

3/ The number of households chosen did not correspond to the size of the village. Annex 1 -83- Page 4 of 9

Village Survey . The respondents for the village survey were

groups of men and women to which the survey questionnaire was administered

separately. The male respondent groups often consisted of the village

chief, members of a council and other other villagers, while female groups,

smaller in siz-e, typically consisted of one or more of the chief's wives

and a handful of other village women. Occasionally a village midwife or

the titular head of the village committee. of the women's branch of Mali's

political party were also present.4 / The entire questionnaire was asked

of the male respondent groups, while the female respondent groups were

asked only those sections pertaining to medical and maternity care. A

total of 473 men and 266 women .participated in respondent groups in 38

villages, for a mean of 13 men and 7 women per village.

Service Survey . The services surveyed were the primary school,

dispensary (or other source of medical care), drug outlet and maternity

ward closest to each village, be it public or private. These services were

in such short supply that it was common for more than one village to share

the same dispensary or drug outlet. The respondent was the head of the

facility; when unavailable, the most senior employee was interviewed. A

total of 21 schools, 15 dispensaries, 6 drug outlets afid 13 providers of

maternity care were surveyed, representing all such facilities closest to

the 38 villages, with few exceptions.

Table 2 summarizes the questionnaires and information collected

in the household, community and service surveys.

4/ Most of these organizations existed on paper only, having been imposed from outside of the village. Annex 1 -84 - Page 5 of 9

Table 2: SUMMARY 01? SURVEY INSTRUMENTS

Number Questionnaire Respondent(s) Completed Information Collected

Household Head of household 186 Agricultural production and other sources of income; some expendi- tures; morbidity of household members; utili- zation of medical care; health and water prac- tices; water usage; willingness to pay for tubewell maintenance and a village health worker.

Village Male and female a/ 38 male Village economy; respondent groups 38 female attitudes on utilization (2 questionnaires of health, schooling and per village) maternity care; location of nearest sources of modern health and schooling; availability and cost of traditional health, schooling and maternity care.

Primary School Headmaster 21 Enrollment statistics; attitudes toward enrollment; fees and other charges; number and training of staff; school quality variables.

Dispensary Nurse or doctor in 15 Type and cost of charge services; availability and price of drugs; training of staff; service statistics.

Maternity Midwife in charge 10 b/ Type and cost of services; training of staff; service statistics; attitudes toward utilization.

Pharmacy Head of Pharmacy or 6 Price and availability of FGR drugs; training and qualifications of staff. a! Female respondent groups were asked only the sections pertaining to health and maternity care. b/ Information on rural matrones was collected on dispensary question- naires for the dispensaries where they were posted. Annex 1 -85- Page 6 of 9

Representativeness of the Sample

The villages in the survey were probably representative of those in which the water supply and health projects were to be implemented.

Since they were not a random sample of all villages, however, caution must be used in generalizing the results of the household survey to the entire area. Note also that only villages were surveyed; there were no households from towns. The examination below of the geographical distribution of survey villages within the area, village size, and the ethnic composition of the household sample suggests how the villages surveyed might differ from a random sample of villages.

The location of all survey villages is marked on the map in

Figure 1. The 15 villages in Kita were more dispersed than those in the other two cercles but were spread across the center of the cercle; the northern and southern thirds of Kita were not represented. In Bafoulabe,

11 of 13 villages were in the extreme north of the cercle. The villages in

Kenieba cercle were concentrated in the west and northwest particularly in the mountainous area northeast of Kenieba town.

The geographic concentration of survey villages means that certain prevalent economic activities may be under- or overrepresented in the sample. For example, many of the villages surveyed in Kinieba were located in the most mountainous area and therefore may have had greater access to gold mines than villages in southern or eastern Kenieba. The villages in Bafoulabe may overrepresent herding or remittances, given that Annex 1 86 Page 7 of 9

Figure 1. Location of Survey Villages in Kita, Eåfoulabe and Kenieba Cercles

KM 65 öS

e*

, * vti

KiTA e@

o Cgep -LIE .. ccx..E Annex 1 Page - 6f 9

- 87 -

most villages in that cercle are located further south in a wetter zone.

In fact, the latitudes with greatest rainfall, in southern Kita and

Kenieba, may support a different combination of economic activities than

the latitudes of villages surveyed. Further, the clustering of villages

surveyed explains why many shared the safe health and schooling

facilities. Thus, the accessibility of villages to these facilities--while

entirely appropriate for the analysis for household demand for health and

schooling--should not be considered representative of the access to

services in the three cercles.

One of the ways in which the uneven geographic distribution

of villages may have affected the composition of the sample is by,over or

underrepresenting certain ethnic groups. -In comparing the results of the

Bamako Medical School's epidemiological survey of the area, it seems that

two groups -- the Sarakolle and Peulh -- were slightly overrepresented in

survey villages, while one prominent group, the Dialonke, were missed

entirely (see Table 3). The latter is not surprising, as the Dialonke

inhabit the far southern reaches of Kenieba and Kita and no survey villages

were chosen from this area.

Table 3: ETHNIC COMPOSITION OF SAMPLES, HOUSEHOLD AND EPIDEMIOLOGICAL SURVEYS COMPARED (PERCENT)

Ethnic Group Household Survey Epidemiological Survey

Malinke 52 58 Kassonke 9 13 Sarakolle 17 9 Peulh 15 7 Dialonke 0 12 Bambara 5 2 Other 2 0 Annex 1 Page 9 of 9

- 88 -

Finally, the survey villages were almost twice the size of average settlements in all three cercles, according to 1976 census data

(see Table 4).

Table 4:- POPULATION OF SURVEY VILLAGES AND ALL VILLAGES

Bafoulabe Kenieba Kita Total

Survey villages 738 808 949 840 All villages 384 474 - 556 485

Source: 1976 census. Annex 2 - 89O 89 Page 1 of 2

Annex 2: Note on the Calculation of Household Income

Household income was estimated by adding the shadow value of

crops net of input purchases, the annualized value of livestock, and the

income from gold-seeking, remittances, and other secondary activities.

Crop Income

Income from crops was calculated from production data. Income

from cash crops--here, groundnuts--was obtained by multiplying production,

as reported by respondents, by the farmgate price of groundnuts.

The portion of subsistence crop production which is self-consumed should be priced at its opportunity cost, which in most circumstances is the farmgate price. In this area, however, the retail price of subsistence crops was twice the farmgate price. By using the farmgate price for valuing self-consumed grain, we would be undervaluing agriculture against alternative activities, as such a substitution would not provide the family with an equivalent quantity of food. Thus, the portion of subsistence crop production consumed by the household was valued at the retail price and any surplus production was valued at the farmgate price. 1/

1/ The quantity of grain consumed annually by each household was estimated by multiplying the average daily consumption per capita by the number of household members, and this figure times 365 days. The average daily consumption of subsistence grains per capita reported by households was 0.618 kg., which provides nearly 2000 kcal. This figure compares favorably with more elaborate nuitrition surveys carried out in similar areas. Annex 2 -90- Page 2 of 2

The method used for calculating income from agricultural production produces a higher figure for total household and per capita income than would have been the case had we used the farmgate price as the opportunity cost of all production, as shown in the Table below. The latter method would not change the ranking of income by cercle, but would result in a per capita income estimate roughly 10,000 MF less for all three cercles. Note that the proportion of income derived from agriculture in

Bafoulabe and Xenieba would decline from roughly one third to less than one fourth of total income, while in Kita crop production would still comprise

69 percent of the total.

INCOME ESTIMATES (000 1F)

Bafoulab6 Kenidba Kita (1) (2) (1) (2) .(1) (2)

Net value of crops 228.2 133.5 277.4 171.4 580.6 427.1

Household income 684.7 589.9 929.8 823.8 775.1 622.0

Per capita income 59.1 50.9 81.1 71.9 50.3 40.4

Note:

Assumptions on opportunity cost of consumed subsistence production: (1) farmgate price for production sold; retail price for that consumed; (2) farmgate price for all production.

Income from Livestock

Income from livestock was estimated by annualizing the value of livestock holdings: the stock was valued at its current market price and the value of each animal was divided by the estimated number of years of market value. Annex 3 -91- Page 1 of 3

Annex 3. Note on the Model of Household Demand

We assume the household maximizes a utility function

U = U (Ct,t+1, Ht,t+i) (1)

where Ct,t+1 represents consumption of family members in this and the next

period, including consumption of water and Ht,t+1 health status of members

in this and the next period. Consumption of family i in this period is a

function of labor supply of family members ( kL, = 1...n) which produces earned income, but reduces time for leisure and schooling, and unearned income (Vit) in this period (e.g., remittances):

Cit = Cit (Z Lk,it, Vit) (2) k

Labor supply (or earned income) is a function of family structure (size, sex and dependency ratio) (Si), an index of the health status of family members based on morbidity (Mik), unearned income, and labor market conditions in the community j (Rj) where the family resides:

(kLkit = JL (Sit, Vit, Mikt, Rj) (3) Annex 3 -92 - Page 2 of 3

The family health status index (or in negative terms, the

morbidity index), is a function of the availability of preventive health

services in community j (PHj), the household's access to water (Ti), the

local disease vectors (Dj), and food habits in household i (Fi). Note that

we assume that morbidity in the first period is not directly related to

income.

Mik = Mik (PHJ, Ti, Dj, Fi) (4)

Health and consumption in the next period are a function of expenditures in

the first period on health, given morbidity (XH,t/Mt); expenditure on water

(X ,t); expendfture on education (XE,t) and a vector of other household H decision variables (W) including fertility and marriage decisions, savings, migration, etc.:

Ht+i, Gt+1 = f(XE,t H,t/Mt, XT,tW) (5)

Sending children to school in period t is thus an investment to increase consumption of health and other goods in period t + 1. Spending on both water and health, given morbidity, are investments in future health,.as well as ends in themselves; curing of disease increases potential labor supply and thus income in the next period.

The household faces the usual constraints on expenditures of time and cash income. The full income constraint can be written:

EkLkwtk+Vi =;k(T-L-E-M)WK + H(XH)+PE (XE)+PT(XT)+Po(xo) (6) Annex 3 Page 3 of 3

Expenditure on leisure (T-L-S-E is total time less work time less time on education less time sick) plus expenditures on health care (including drugs), schooling, water and other goods, cannot exceed the sum of earned and unearned income.

Demand functions for health, water and schooling can be derived from maximization of the utility function (1) subject to production relations embedded in (2), (3), and (4) and (5) and the budget constraint

(6). The demand functions will be expressed in terms of the exogenous variables, including the prices of all goods, wages, and the predetermined variables such as food habits and access to water. Annex 4 9 - Page 1 of 5

ANNEX 4. Means and Standard Deviations of Regression Variables

Schooling Regressions (Table 3.1)

Standard Variables Mean a/ Deviation

Dependent variable Number of persons enrolled minus number of -1.89 2.06 persons aged 6 to 14

Household variables Household income-in hundreds of Mali Francs 8138.44 8334.11 Natural logarithm of household income 8.67 .986 in hundreds of Mali Francs Number of persons aged 15 to 50 divided 2.62 1.69 by persons aged 6 to 14

School quality variables Average education of teachers in years 11.2 .246 Student-teacher ratio 34.1 7.62 Index of number of grades in school 2.92 1.14 Number of books per classroom 2.15 3.47 Number of weeks since teachers paid 10.0 6.28 Proportion of students passing primary .327 a/ .278 school leaving test.

School fee variables Natural logarithm of fees to parent 2.0 .353 association in hundreds of Mali Francs Dummy: enrollment fee charged at .504 .502 nearest school

Distance to school variables Kilometers from village center to nearest 8.30 9.58 primary school Dummy: school located outside village but .114 .319 within 5 kilometers Dummy: school 6-10 kilometers away .106 .309 Dummy: school 11-15 kilometers away .114 .319 Dummy: school 16-20 kilometers away .0976 .298 Dummy: school more than 20 kilometers away .146 .355 a/ Sample size is 123 except for proportion of students passing test variable, for which.sample size is 113. Annex 4 95 - Page 2 of 5

Drug expenditure regressions (Table 4.1)

Standard Variables Mean a/ Deviation

Dependent variable: Natural logarithm of expenditures on modern drugs in hundreds of Mali Francs 2.47 2.58

Independent variables: Natural logarithm household income in hundreds of Mali Francs 8.52 1.08 Dummy if remittance income .444 .498 Dummy if household member attended adult literacy classes .233 .424 Proportion of household members attending school .091 .142 Dummy if onchocerciasis b/ .150 .358 Dummy if guinea worm b/ .078 .269 Dummy if leprosy b/ - .067 .250 Dummy if stomach ailment b/ .394 .490 Dammy if other illness b/ .483 .501 Proportion of household members sick .154 .166 Distance to nearest health.facility in kilometers 14.1 11.1 Distance to nearest drug outlet in kilometers 39.6 33.5 Quality of nearest health facility c/ 2.10 .580 ,Quality of nearest drug outlet d/ 2.46 .787 Dummy if health facility and drug outlet at common site .556 .498 Dummy if household has own well .289 .455

a/ Sample size=180. b/ If any household member had this illness in the previous year, dummy=1. c/ The quality index was constructed on the basis of number and training of health personnel at the nearest health facility.' A value of 3 indicates the presence of a doctor or a trained university nurse rt the dispensary; 2 indicates presence of 2 or more qualified health staff; and 1 indicates presence of less than 2 health staff. d/ The drug outlet quality index was constructed on the basis of availability of drugs at the nearest drug outlets. See Chapter 4, p. 48, footnote 3. Annex 4 Page 3 of 5 - 96 -

Health Regressions (Table 4.3)

Standard Variables Mean a/ Deviation

Dependent variables Sample probability of using: 1) Modern practitioner .31 .46 2) Traditional practitioner .36 .48 3) Both modern and traditional practitioner .28 .49 4) Self treatment .06 .23

Independent variables Household income in hundreds of 8625.5 8577.1 Mali Francs Dummy if remittance income b/ .49 .50 Dummy if well in compound .36 .48 Dummy if household member attended adult .24 .43 literacy classes Dummy for sex of sick person- c/ .44 .50 Distance to nearest health facility in kms. 14.2 11.1 Distance to nearest drug outlet in kms. 40.6 34.2 Quality of nearest health facility d/ 2.1 (.63) Quality of nearest drug outlet e/ 2.5 .80

a/ Sample size 259 cases b/ The base category is income from agricultural production. / Male = 1, female = 0. / The quality index was constructed on the basis of number and skill of personnel at the dispensary. e/ The quality index was constructed on the basis of availability of 11 essential drugs at the drug outlets. See chapter 4. Annex 4 Page 4 of 5 - 97 -

Willingness to pay for well maintenance regression (Tables 5.4)

Standard Variables Mean Deviation

Dependent variables Natural logarithm of willingness to 2.24 1.2 pay for well maintenance in hundreds of Mali Francs

Independent variables Natural logarithm of household income 8.52 1.07 in hundreds of Mali Francs Dummy if remittance income .442 .499 Dummy if household member attended .224 .418 adult literary classes Dummy if onchorcerciasis a/ .145 .353 Dummy if guinea worm a/ .073 .260 Dummy if leprosy a/ .062 .241 Dummy if stomach ailment a/ .386 .488 Dummy if other illness a/ .48 .501 Dummy if household has own well a/ .. 268 .444 Distance to year-round water source 827 1562 in meters Dummy: Kenieba .285 .453 Dummy: Kita .341 .475 a! Applies if any household member was reported to have had particular illness during the year prior to the survey. Annex 4 -98- Page 5 of 5

Willingness-to-pay for health worker regression (Tables 5.5)

Standard Variables Mean Deviation

Dependent variable Natural logarithm of willingness to 1.89 1.07 pay for health worker in hundreds of Mali Francs

Independent variables Natural logarithm of household income 8.52 1.08 in hundreds of Mali Francs Dummy if remittance income .442 .498 Dummy if household member attended .232 .423 adult literary classes Proportion of household members .090 .142 attending school Dummy if onchocerciasis a/ .149 .357 Dummy if guinea worm a/ .077 .268 Dummy if leprosy a/ .066 .250 Dummy if stomach ailment a1 .392 .490 Dummy if other illness a, .481 .501 Dummy if household has own well .287 .454 Distance to nearest health facility 14.1 11.1 in kilometers Distance to nearest drug outlet in 39.3 32.5 kilometers Quality of nearest health facility b/ 2.10 .578 Quality of nearest drug outlet b/ 2.45 .792 Dummy if health facility and drug .558 .498 outlet at common site a! Applies if any household member was reported to have had particular illness during the year prior to the survey. b/ See Chapter 4 for explanation of quality index. - 99 -

References

Ainsworth, Martha. "The Demand for Health and Schooling in Mali: Results of the Community and Service Provider Survey." Country Policy Department Discussion Paper No. 1983-7. World Bank, March 1983.

Ainsworth, Martha, Punam Chuhan and Francois Orivel. "Cost Recovery for Health and Water Projects in Rural Mali: Household Ability to Pay and Organizational Capacity of Villages" in "Three Studies on Cost Recovery-in Social Sector Projects," CPD Discussion Paper No. 1983-8, February 1983.

Akin, John S., Charles C. Griffen, David K. Guilkey and Barry M. Popkin. "The Demand for Primary Health Care Services in the Bicol Region of the Philippines." Paper presented at NCIH Conference on Financing Health Services in Developing Countries, Washington, D.C., June 1982.

Akin, J.S., Guilkey, D.K. and Popkin, B.M. "The Demand for Child Health Services in the Philippines." Social Science and Medicine 15C:4 (1981)., pp. 249-57.

American Public Health Association. "Primary Health Care Issues: Comiunity Financing." Washington, D.C., 1982. -

Becker, Gary S. "A Theory of the Allocation of Time." Economic Journal 75 (September 1963), 493-517.

Behrman, Jere R. and Nancy Birdsall. "The Quality of Schooling: Quantity Alone is Misleading." American Economic Review 73 (December 1983), pp. 928-946.

Birdsall, Nancy. "Demand for Primary Schooling in Rural Mali: Should User Fees be Increased?" in "Three Studies on Cost Recovery in Social Sector Projects." CPD Discussion Paper No. 1983-8, February 1983.

Birdsall, Nancy. "Strategies for Analyzing Effects of User Charges in the Social Sectors." Country Policy Department Discussion Paper No. 1983-9, pp. 928-946.

Birdsall, Nancy and Punam Chuhan. "Client Choice of Health Care Treatment in Rural Mali." Population, Health and Nutrition Department. Technical Note No. 86-15. World Bank, 1986.

Birdsall, Nancy and Punam Chuhan. "Willingness to Pay for Health and Water in Rural Mali: Do WTP Questions Work? in "Three Studies on Cost Recovery in Social Sector Projects," CPD Discussion Paper No. 1983-8, February 1983. 100 -

Brookshire, David S., Mark A. Thayer, William D. Schulze and Ralph C. Arge. "Valuing Public Goods: A Comparison of Survey and Hedonic Approaches." American Economic Review 72:1 (March 1982), pp. 165-177.

Chen, Pi-Chao. "Population and Birth Planning in the People's Republic of china". Population Reports, January-February 1982.

Club .du Sahel, CILSS (Comite Permanent Inter-Etats de Lutte Contre La Secheresse dans le Sahel), Working Group on Recurrent Costs. Recu'rrent Costs of Development Programs in the Countries of the Sahel, Analysis and Recommendations. Ouagadougou, October, 1980.

Ecole Nationale de Medicine et de Pharmacie du Mali. "Evaluation Sanitaire des Cercles de Kenieba, Bafoulabe, Kita: Rapport Preliminaire." February 1982.

Favin, Michael. AID-Assisted Primary Health Care Projects: Summary Reviews, 1981.

Feachem, Richard and others. Water, Health and Development. London: Tri-Med Books, 1978.

Vollain, J.R. and E. Jimenez. "Estimating the Demand for Housing Characteristics in Developing Countries." Water Supply and Urban Development Department Discussion Paper No. 43. World Bank, 1983 (Urban Studies, forthcoming).

Freeman, A. Mynick III. The Benefits of Environmental Protection. Baltimore, Md.: Johns Hcpkins University Press, 1979.

Freeman, A. Mynick III "Approaches to Measuring Public Goods Demands," American Journal of Agricultural Economics 61:5 (December 1979), pp. 915-920..

Gray, Clive and Andre Martens. "The Political Economy of the 'Recurrent Cost Problem' in the West African Sahel." Mimeo, January 1982.

Hanushek, Eric A. and John C. Jackson, "Statistical Methods .for Social. Scientists." (New York: Academic Press, 1977).

Heller, Peter, S. "A Model of the Demand for Medical and Health Services in Penninsular Malaysia," Social Science and Medicine, 16:3, (1982) pp. 267-284.

Heyneman, Stephen and William Loxley. "The Effect of Primary School Quality on Academic Achievement Across Twenty-Nine High- and Low-Income Countries." American Sociological Review 88:1 (1983), pp. 162-194. - 101 -

Kurz, Mordecai. "Experimental Approach to the Determination of the Demand for Public Goods." Journal of Public Economics 3 (1974), pp. 329-348.

Maler, Karl-Goran. "A Note on the Use of Property Values in Estimating Marginal Willingness to Pay for Environmental Quality." Journal of Environmental Economics and Management 4 (1977), pp. 355-369.

Mitchell, Robert C. "A Note on the Use of the Contingent Valuation Approach to Value Public Services in Developing Nations." Draft, December 1982.

Mitchell, Robert and Richard T. Carson. An Experiment in Determining Willingness to Pay for National Water Quality Improvements. Washington, D.C.: Resources for the Future, 1981.

Newhouse, Joseph P. "The Demand for Medical Care Services: A-Retrospect and Prospect" in Health, Economics and Health Economics, J. van der Gaag and M. Perlman, eds. (North Holland Publishing Company, 1981).

Psacharopoulos, George. "Measuring the Welfare Effects of Educational Policies" in Public Economics Human Resources, Victor Halberstadt and Anthony J. Culyer, eds. Paris: Editions Cujas, 1977.

Randall, Alan, John Hoehn and George S. Tolley. "The Structure of Contingent Markets: Some Results of a Recent Experiment." 1982. Draft,

Republique du Mali. Inspection de 1'enseignement fon6imental de Bafoulabe." Rapport de rentree, 1981-82". December 30, 1981.

Republique du Mali. Inspection de V'enseignement fondamental de Kita. "Rapport de rentree scolaire, 1981-82". January 5, 1982.

Republique du Mali. Societe nationale d'etudes pour le developpement. "Projet d'alimentation en eau et developpement sanitaire: Rapport Sociologique." Bamako, February 1982.

Republique du Mali, UNESCO. L'education au Mali: Probl4mes, Perspectives et Priorites,, Bamako, May 1981.

Samuelson, Paul. "The Pure Theory of Public Expenditure." Review of Economics and Statistics 36 (November 1954), pp. 387-89.

Schneider, F. and W.W. Pommerehne, "Free Riding and Collective Action: An Experiment in Public Microeconomics." Quarterly Journal of Economics 4 (November 1981), pp. 689-704.

Schultz, T.W. Investing in People: The Economics of Population Quality. Berkeley, California, University of California Press, 1980. - 102 -

Thobani, Mateen. -"Charging User Fees for Social Services: The Case of Education in Malawi." World Bank Staff Working Paper No. 572. Washington, D.C.:, World Bank, 1983.

United Nations Fund for Population Activities. Mali: Report of Mi8sion on Needs Assessment for Population Assistance. Report No. 8, December 1978.

Warford, Jeremy. "Financing Rural Health Care, (China)." World Bank, draft, 1982.

World Bank. Mali Agricultural Sector Memorandum, Report No. 2567-MLI, June 22, 1979.

World Bank, Mali Research Project (RPO 672-72) staff. "The Mali Household, Community and Service Provider Surveys: Documentation." Country Policy Department, 1983.

World Bank. Education Sector Memorandum, Republic of Mali. Report No. 3637-MLI. December 4, 1981.