Unpacking the red packets: institution and informal payments in healthcare in China

Ning Liu, Zhuo Chen, Guoxian Bao

Research output: Journal PublicationArticlepeer-review

3 Citations (Scopus)


Informal cash payments from patient to healthcare providers for services provided by the healthcare system have attracted increasing scholarly interest. However, the root and mechanism of informal payments are not well understood. This paper contributes to the literature by positing informal payments as informal institutions. We use a nationally representative longitudinal survey in 28 provinces in China to explore the root of informal payments. Our empirical findings suggest that patients’ informal payments for healthcare services may originate from information acquisition and processing, failure of government and market in allocating healthcare resources, and disparities in utilization. Further, this informal institution could be changed by the self-reinforcement of individual patients. These findings suggest that policies to facilitate transparency and to remove institutional barriers, such as the introduction of market competition, may reduce the incidence of informal payments.

Original languageEnglish
Pages (from-to)1183-1194
JournalEuropean Journal of Health Economics
Issue number8
Early online date7 Jun 2021
Publication statusPublished - Nov 2021


  • Healthcare
  • Informal institutions
  • Informal payments
  • Institutional theory

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Health Policy


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