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The Use of Financial Incentives to Prevent Undesirable Behaviors / de Walque, Damien.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- de Walque, Damien.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Alcohol.
- Early Marriage.
- Financial Incentives.
- Hiv/Aids.
- Illicit Drugs.
- Obesity.
- Poverty Reduction.
- Smoking.
- Social Development.
- Social Policy.
- Local Subjects:
- Alcohol.
- Early Marriage.
- Financial Incentives.
- Hiv/Aids.
- Illicit Drugs.
- Obesity.
- Poverty Reduction.
- Smoking.
- Social Development.
- Social Policy.
- Physical Description:
- 1 online resource (39 pages)
- Place of Publication:
- Washington, D.C. : The World Bank, 2018.
- System Details:
- data file
- Summary:
- Behaviors that are putting people's health and well-being at risk are widespread in the developing world and some of them, like smoking and unhealthy diets, are on the rise. Some of these behaviors can be prohibited or prevented by taxation. But financial incentives such as conditional cash transfers are also increasingly proposed and tested to discourage such behaviors, in domains as varied as HIV/AIDS, drugs, alcohol, smoking, obesity, or early marriage prevention. This paper presents the theoretical justification for using such incentives, distinguishing between the price, income effects, and the nudge effects. The growing literature about the effectiveness of financial incentives to prevent undesirable behaviors is reviewed in detail for each type of harmful behavior. Finally, the paper discusses the long-term sustainability of such incentives, a key issue if they are to be scaled up beyond pilot programs and research projects. The current evidence on whether such incentives have an impact after they are discontinued is mixed. Some design features, like lotteries or commitment devices, could induce savings as well as increase effectiveness, therefore improving sustainability.
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