Pay for Honesty? Lessons on Wages and Corruption from Public Hospitals

Abstract

Theft, graft, absenteeism and soliciting bribes in the health sector in developing countries is often blamed on low pay. But does low pay actually explain corruption? Several studies of public hospitals in Latin America suggest otherwise. In particular, they show that low pay may contribute to corruption; however, without some form of monitoring to detect corruption and a real chance of penalties, raising wages is not likely to make a difference.