Effective incentives in critical situations. Analysis and description of the functioning of the health care system, with a specific focus on how monetary and non-monetary incentives affect performance in two Eastern European countries (Serbia and Albania).

1.1. The present research project confronts the issue regarding the conditions which make incentives, and the aid of external donors in particular, effective in the design and implementation of policies aimed at changing and improving a critical situation, namely the deteriorated and inefficient health systems of Serbia and Albania. The main problem is in fact that, in most cases, there persists a wide and apparently insurmountable gap between the policy established and its implementation. 1.2. The research project proposes to focus on the role played by the policy context in making the received reform and aid program sustainable and effective. The policy context in which incentives are applied may be just as important as the incentives themselves. 1.3. Following the theoretical framework, several variables of the policy context can be pointed out that affect, or impede, the sustainability of a reform and aid program in the health field. - A centralised health system, characterised by a strong bureaucratic (going-by-the-book) architecture and by a weak capacity for planning, especially when dependent on or exposed to political instability; - Reciprocally, a weak institutional infrastructure which is unable to promote and sustain a local development perspective, and actors’ involvement and participation in policy implementation at the local level; - A problematic reform of health financing, regarding both funding (e.g. the implementation of effective health insurance systems) and resource allocation (e.g. the technical and administrative capacity building of purchasers); - An input-oriented allocation of resources which makes supply insensitive to demand, does not allow results to be acknowledged and appreciated as a basis for the continuation of the program. This input-oriented approach is incapable of receiving and benefiting from external resources and from resources of the local contexts, which are potentially made available by the aid program; - A policy cultural context characterised by fragmentation, a generally passive attitude, the lack of intermediate organisation promoting habits of belonging and participation in collective actions, thus resulting in a weak capital of social bonds (the s.c. or “social capital”) through which individuals could become involved in the policy implementation process; - The lack of rules that translate funding into incentives which are coherent with the policy to be implemented; - The dearth of civil society institutions with the capacity to engage in the policy debate. Donor organisations are insisting on the focus on service delivery and humanitarian assistance in view of the economic, social and humanitarian crisis in the region, yet they often fail to develop greater participatory democracy. However, there are now trends in the work of NGO’s to move towards community-based coalitions, with systematic support to civil society development at the local level, and with attention given to the local societal context (Kickbusch 2004: 133). 1.4. The theoretical framework proposes to integrate in the aid programs indirect strategies which should have an effect on the policy context. These strategies are to be steered particularly towards creating a collective-action situation which involves the benefiting parties, and which allows the transfer of the responsibility and ownership of the program to them.