ABSTRACT
Throughout the book, we have referred extensively to incentives – but we have rather taken their meaning and implications for granted. This chapter takes a closer look at what we mean by incentives, and develops the framework of principal-agent theory through which incentives operate. Sections 18.7 to 18.11 go on to review the difficulties of managing the mix of incentives that are present in any context and some examples of policy measures which can be used to intervene in the incentive environment in the health sector.
