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ABSTRACT

Market-oriented reforms in the health sector continue to dominate health policy agendas in many developing countries despite growing evidence of their negative impacts. This article critically examines eight key arguments that are used to justify market-oriented reforms and that continue to hold widespread appeal among policy makers and analysts. The authors conclude that although the axiom that health care is atypical due to pervasive market failures is widely acknowledged by reformers, the scope and depth of the negative consequences of market competition and private sector involvement are systematically underestimated in policy design and implementation, while the regulatory capacity to overcome them is overestimated. Their analysis suggests that while there is considerable scope for market-oriented reforms, the success of such reforms depends on a tight set of conditions that are often absent in the health care sector, especially but not exclusively in developing countries.