BUREAUCRATS AS PURCHASERS OF HEALTH SERVICES: LIMITATIONS OF THE PUBLIC SECTOR FOR CONTRACTING
| Published date | 01 August 2011 |
| DOI | http://doi.org/10.1002/pad.581 |
| Date | 01 August 2011 |
BUREAUCRATS AS PURCHASERS OF HEALTH SERVICES:
LIMITATIONS OF THE PUBLIC SECTOR FOR CONTRACTING
SHEHLA ZAIDI
1
*
,y
, SUSANNAH H MAYHEW
2z
AND NATASHA PALMER
3z
1
Department of Community Health Sciences, Aga Khan University, Pakistan
2
Department of Population Studies, London School of Hygiene & Tropical Medicine, UK
3
Department of Global Health and Development, London School of Hygiene & Tropical Medicine, UK
SUMMARY
Contracting out of health services increasingly involves a new role for governmentsas purchasers of services. To date, emphasis
has been on contractual outcomes and the contracting process, which may benefit from improvements in developing countries,
has been understudied. This article uses evidence from wide scale NGO contracting in Pakistan and examines the performance of
government purchasers in managing the contracting process; draws comparisons with NGO managed contracting; and identifies
purchaser skills needed for contracting NGOs. We found that the contracting process is complex and government purchasers
struggled to manage the contracting process despite the provision of well-designed contracts and guidelines. Weaknesses were
seen in three areas: (i) poor capacity for managing tendering; (ii) weak public sector governance resulting in slow processes, low
interest and rent seeking pressures; and (iii) mistrust between government and the NGO sector. In comparison parallel
contracting ventures managed by large NGOs generally resulted in faster implementation, closer contractual relationships, drew
wider participation of NGOs and often provided technical support. Our findings do not dilute the importance of government in
contracting but front the case for an independent purchasing agency,for example an experienced NGO, to manage public sector
contracts for community based services with the government role instead being one of larger oversight. Copyright #2011 John
Wiley & Sons, Ltd.
key words — contracting process; government capacity; NGOs; independent management agency; Pakistan
INTRODUCTION
Contracting out of health services increasingly involves a new role forgovernment moving from traditional service
delivery to purchasing and monitoring of services (Taylor, 2003). Research focus has predominantly been on
contractual outcomes, however, public sector capacity for managing the contracting process has been questioned
(Bennett and Mills, 1998). Given that there has been increased application of donor backed contracting in
developing countries (Soeters and Griffiths, 2003; Palmer et al., 2006; Perrot, 2006; Lundberg, 2007) there is need
to understand how the contracting process can be improved.
Management of contracting involves a range of functions, including (i) writing of contracts; (ii) tendering, (iii)
bid evaluation, award and negotiation and (iv) monitoring and support for contract implementation (Walsh, 1997).
Concerns have been raised on government ability to write and monitor well-specified contracts (Bennett and Mills,
1998; Siddiqi et al., 2006) and to provide well-run management systems (Gilson and Mills, 1995; Grindle and
Hildebrand, 1995). Governments need to also ideally be able to attract good suppliers, provide a supportive
partnership for contract implementation and endeavour to minimize political interference from decisions relating to
contract award and management.
public administration and development
Public Admin. Dev. 31, 135–148 (2011)
Published online 5 January 2011 in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/pad.581
*Correspondence to: S. Zaidi, Department of Community Health Sciences, Aga Khan University, Stadium Road, Karachi, Pakistan.
E-mail: shehla.zaidi@aku.edu
y
Assistant Professor.
z
Senior Lecturer.
Copyright #2011 John Wiley & Sons, Ltd.
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