Regulating health care in low- and middle-income countries: broadening the policy response in resource constrained environments

Regulation is traditionally seen as the use of bureaucratic and administrative controls by government to correct market failure. Yet traditional methods such as licensing and certification frequently fail to control behaviour because of the limited resources available to government in low- and middle-income countries, and because of the powerful countervailing incentives that encourage deviant behaviour to continue. It is increasingly being realised, therefore, that goals of policy can sometimes be achieved more efficiently by involving other actors in the regulatory mechanism. In addition, a more flexible view of regulatory tools and strategies may enable governments, particularly in resource constrained environments, to utilise a much wider range of administrative controls and market enhancing incentives. The review suggests a wide range of tools that may be utilised to encourage better behaviour. These require that governments become aware of the need to reinforce controls with enabling incentives, utilise external standards where local measures are deemed inadequate and promote greater access to information on standards and services to consumers and providers. Keywords: Health sector regulation; Low- and middle-income countries; Administrative control; Incentives; Contracts