Haas School of Business

First-Person

Paul Gertler

Paul Gertler

Li Ka Shing Foundation Chair in Health Management

Paul Gertler: Bridging Worlds to Influence International Health Policy

Paul Gertler, La Ka Shing Distinguished Professor of Economics at UC Berkeley's Haas School of Business and Professor of Health Policy and Management at the School of Public Health, has spent his career working on research that has changed how international organizations, governments, or NGOs operate to improve the lives of people around the world.

He looked forward to extending his research and work within the Institute for Business & Social Impact: "Our Institute for Business & Social Impact signals that what we're doing at Berkeley is not just about the bottom line," says Gertler. "But it's about growing the economy and growing it in a socially responsible way. It's about affecting policy that affects people's lives. At Berkeley, we're good at bringing people together from across different areas who have common interests to have impact and to affect the world. I think the institute can make us more than just the sum of all the individuals attached to it."

As someone who has successfully married a life in academia with other external roles such as the Chief Economist, Human Development Network at the World Bank from 2004 to 2006 and Senior Economist at the RAND Corporation, a nonprofit global policy think tank, from 1988 to 1994, Gertler is used to working across different organizations, different fields, and with governments and policy makers.

He is considered an early pioneer in the randomized evaluations of social programs in developing countries such as Mexico and Rwanda. Dr. Stefano Bertozzi, Dean of the School of Public Health at Berkeley and a prominent global health scientist, AIDS expert, and health economist says: "Paul has been one of the most important drivers of rigorous evaluation of large scale health and development programs in the areas of health, nutrition, education, and poverty."

And at the World Bank, he helped to establish a culture of rigorous impact evaluation. "I like to work on at-scale real interventions or real issues," he notes, where he can bring his expertise in evaluation and analytics to the table.

Bertozzi adds: "He's contributed in numerous ways--in terms of methodology and econometric approaches and because of the relationships he has developed with governments and multi-lateral organizations to influence the design of the programs. His work has been critically important to having programs that are able to contribute global understanding of how some of these programs work or don't work."

Practical Work: Changing Policy

Throughout his career, Gertler's research has been influential in both the academic world and in the international policy community. But the bodies of research that have been "picked up" by the international policy community have been more personally satisfying to Gertler.

Laura Rawley, a program manager at the World Bank, says that Gertler "has really bridged the gap between solid technical work and informed policy dialogue." She adds, "He not only does very good technical work, but has also been able to effectively engage senior policy makers around the world using the evidence that is produced to inform critical decisions about their programs."

One example is Gertler's work with the Mexican government on their first large-scale conditional cash transfer program to alleviate poverty and to break the intergenerational transmission of poverty in Mexico. The program was originally launched in 1997 and called Progresa, designed to target poverty by providing cash payments to families in exchange for regular school attendance, health clinic visits, and nutritional support. The program's name was later changed to Oportunidades.

Because the administration was in the middle of its six-year term (Mexican governments could not be re-elected) and this program would have a 10 to 15 year horizon to be effective, Gertler was recruited in 1997 "to develop evidence to make it hard for the next government to dismiss the program," according to Bertozzi.

Bertozzi, who had worked with Gertler on the Progresa evaluation explains: "This was the first large-scale conditional cash transfer program that was evaluated vigorously. It's very difficult for large anti-poverty programs like this to survive from one administration to the next because these programs have very important political implications and are often seen as voter recruitment initiatives. It's also very common for a new administration to abandon the programs of the previous one and start up their own programs in other areas. The Progresa program not only needed to survive a change in president, but also a change in party and government."

Gertler was asked by the budget director at the time to be one of four members of an external evaluation team to evaluate the impact of the cash transfer program using a randomized design. He was a member of the team that designed the evaluation strategy and the primary investigator of the impact of health, cognitive development, adolescent risk, and savings and investment components of the evaluation.

Gertler and the team worked with the government to run large randomized trials on 500 communities with 24,000 households and "we found massive improvements in health, education, reductions in poverty after just two years," he says.

As a result of this evaluation, the program was sustained across political administrations, today has over five million families enrolled,and "it has been credited with having a large impact on people's lives in terms of lowering poverty," says Gertler.

Moreover, the evidence from this work has been used in different ways by the World Bank, the Inter-American Development Bank, the African Development Bank, USAID, etc. "These other programs reach well over 50 countries and over 100 million people are enrolled in them," says Gertler. "While I don't know whether this research was seminal, I do know that it really contributed to the way agencies view poverty and how to lower poverty so I'm especially proud of that."

Another paper that has influenced international policy, "Paying Primary Health Care Centers for Performance in Rwanda," focuses on using financial incentives in developing countries and was authored by Gertler, Agnes L.B. Soucat, Christel M.J. Vermeersch, Paulin Basinga, Agnes Binagwaho, and Jennifer R. Sturdy.

This paper evaluates the impact of paying for performance (P4P) on the use and quality of prenatal, institutional delivery, and child preventive care in Rwanda. The team analyzed treatment facilities that were enrolled in the P4P scheme in 2006 and comparison facilities that were enrolled two years later. Data was collected from 166 facilities and a random sample of 2,158 households.

According to the paper, the study shows that P4P had a large and significant positive impact on institutional deliveries and preventive care visits by young children, and improved quality of prenatal care. The authors found no effect on the number of prenatal care visits or on immunization rates. P4P had the greatest effect on those services that had the highest payment rates and needed the lowest provider effort. Thus, the researchers concluded that P4P financial performance incentives can improve both the use of and the quality of health services.

Gertler also conducted similar evaluation work with the Argentinian government on their incentive program called Plan Nacer which was launched in 2004 and was supported in part by the World Bank. Plan Nacer provided basic health insurance to two million uninsured pregnant women and children, while creating incentives to provinces and health service providers to expand coverage of key services at a standard of quality.

"The work with the Rwandan and Argentinian governments shows that to make healthcare systems work better, providing financial incentives based on outcomes, more access, and higher quality can actually lead to massive improvements in quality, access, and health outcomes in those two countries," says Gertler. "Because of this work, the Fonds d'Intervention pour le Developpement (FID) put a billion dollars through the World Bank into these types of programs in Africa and Asia and the research is getting a lot of attention by other governments."

Even in the United States, where improving basic healthcare delivery is "just massively hard due to all the vested interests, papers like ours have been quite influential in moving people to use financial incentives for medical care providers," according to Gertler.

Influencing Academic Literature

Beyond influencing international policy, Gertler's work has influenced academia too. One highly academically cited research paper that has also has excited policy makers is titled "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," published in the Journal of Political Economy in February 2005, by Gertler, Sebastian Galiani at the University of Maryland and Ernesto Schargrodsky from the Universidad Torcuato Di Tella.

The paper shows that in Argentina, the privatization of water and sewage systems reduced child mortality by 8 percent by reducing the spread of infectious and parasitic diseases. In fact, this effect was even larger in the poorest areas (26 percent)."Our research shows that in many countries, municipal governments are just really inefficient, driven by politics, have poor management systems, and weak incentives," says Gertler.

Another research paper, "Insuring Consumption against Illness," by Gertler and Jonathan Gruber at MIT and published in the American Economic Review in 2002, shows that there are significant economic costs associated with illnesses from income loss and to a lesser extent from medical expenditures.

This paper addresses the large debate of whether there should be co-pays for healthcare, amongst lower income populations. "There’s an idea that if you charge co-pays, people won't use medical care and thus their medical care won't be insured or basically the idea that people's healthcare utilization is affected by price," says Gertler.

Gertler and Gruber argue that "small co-pays are fine because people really can finance them for minor illnesses, but that people really need insurance for large problems because they can't finance those and those are the things that would throw people into poverty," explains Gertler.

The results of the paper were important because most of the designs of health insurance in the developing world tend to have no co-pays but caps on total benefits and so "these policies actually provided very little insurance," says Gertler. "This paper has a lot of citations and the literature in the whole area of how to design health insurance in low and middle income countries has been influenced by our paper."

A Pioneer in the Field

In an early paper, "How Economic Development and Family Planning Programs Combined to Reduce Indonesian Fertility," that Gertler wrote with J.W. Molyneaux from Brown University published in Demography in 1994, examines the contributions of family planning programs, economic development, and women's status to Indonesian fertility decline from 1982 to 1987.

"This paper was one of the first impact evaluations done in developing countries," says Gertler. "And the paper was one of the first to ask what's been the contribution of governments to lowering fertility. I've worked with others to lead this effort over the last 10 years to bring prospective evaluation to developing country policy."

At the time, conventional thought was that "throwing large amounts of money into subsidies for contraceptives and other such large government programs was really effective in lowering population and fertility," he says. "And most of that evidence was driven by people seeing fertility dropping while government programs were ramping up so I went to Indonesia and got some very interesting, granular data."

Gertler matched data from a survey of 15,000 women and their contraceptive, youth, and birth histories with local level data on the expansion of government programs and showed that Indonesia had dropped their fertility rate by half in a 20-year period, which is "really, really fast," he explains.

"But what the study showed was that the major reasons were not due to this family planning program, but rather to the empowerment of women," says Gertler. "During that same period, the government had mandated that everyone finish primary school. The country also went through an oil boom and there was a big demand for labor. Because the relatively unemployed were women,they started entering the labor force and the male/female wage difference went down. It was really the empowerment of women and a reduction in the demand for children that explains 75 percent of the fertility decline. The family planning program explained very little."

Gertler's study influenced the literature in two ways. First, it showed that when governments structure family planning programs, "we should focus on demand not supply," he says. "Second, this was also was one of the early papers in low and middle income countries which took causality quite seriously. Because we found that women wanted fewer children so they went out and bought more contraceptives, as opposed to the idea that increasing contraceptives inducing women to want to have fewer children and lowering fertility. This research brought U.S. research methods to developing country literature."

Early in his career, Gertler saw the potential impact his work could have on policy. "This guy from the World Bank called me up one day and asked if I was the guy that wrote that paper published in Demography and whether I believed the results," recalls Gertler. "I told him that I did and he said that he was going to use my paper to cancel a billion dollar loan to the Indonesian government! I was floored and we talked about it and looked at the data and realized we could reallocate funds from things that didn't work to information campaigns or sex education programs in schools. He was able to re-program the money and that was quite wonderful."

The Future

As Gertler looks to the future, he hopes to continue working on projects that have impact. He's working with an NGO focused on urban housing in Latin America where he and others are conducting randomized trials of government interventions to try and improve housing and lives of people living in illegal slums.

"I'm now focusing on working with governments to change policy," says Gertler. "It means I might publish a little less and I'm gone a little more, but the work I do has impact on people's lives. At this stage in my career, this is much more interesting to me than just writing another paper."

Gertler also believes a way to make change is by helping others establish their careers so they can have an impact. "I get enormous satisfaction out of that," he says. "I help students and former students advance their careers and I enjoy seeing them move into policy jobs in developed countries and in countries like Mexico."

For example, Gertler met a doctor in Rwanda who was getting his PhD in epidemiology at Tulane University. "He is a super bright guy but was struggling in Rwanda," says Gertler. "We brought him into the research project and he offered a lot. We allowed him to use the data for his PhD thesis and I wrote the paper with him and let him put his name first. Now he's the health economist in Africa and getting all of this attention. We're helping build the career of someone who is much more likely to have influence on what happens in Rwanda than anything I write.

And Gertler will likely continue to use his cross-fertilization skills to bring different worlds together: "Paul is able to bring quite a few worlds together effectively from the research world to policy workers in the developing countries to staff in development institutions," says Rawlings. "He's occupied all of these different worlds and it's nice to see someone who has these bridging skills."

As Gertler looks ahead, he hopes to play an integral role in the Institute for Business & Social Impact. "I'm excited about Laura Tyson's connections, leadership, and vision and am excited to see what we can do together to build the institute," says Gertler. "At the end of the day, I'm quite proud to be in a place that cares not only about business, but also social impact."

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