Competitive and organisational constraints on innovation, investment and quality of care in a liberalised low-income health system: evidence from Tanzania

International health policy proposals increasingly emphasise health system strengthening and innovation. In a context of liberalised provision, the scope for innovative health system rebuilding depends on the viability, effectiveness and capabilities of the non-governmental providers. Yet the research literature examining the market behaviour of private health care firms in developing countries, and the incentive structures and constraints they face, remains limited. We demonstrate here the extent of perverse health care market dynamics found in Tanzania in the late 1990s, in relation to patients’ need for reliable health care, and show that the financial and operating fragility of the firms constrained investment and innovation. We aim to focus attention on the challenge for innovative approaches to poverty reduction represented by the current market and business structure of health care in low income countries and to discuss some policy implications.
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Promoting Innovation, Productivity and Industrial Growth and Reducing Poverty
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