Introduction

Health reforms based on market principles have been introduced widely in both developed and developing countries over the past 20 years. In developing countries, international donors have insisted on health reform as a precondition of providing external aid. The reform packages that have been introduced have been strikingly similar across countries as wide apart as Uganda, Bolivia, and Russia. Uganda embarked on market based health reforms in 1994. These reforms have not only failed to improve health services and the health of the population but have arguably been the key factor behind their deterioration. What can we learn from Uganda's experience?

Health sector reforms in Uganda

Uganda introduced health sector reforms, defined by the World Bank as market reforms, in 1994.1 The reforms were based on four cardinal market principles2:

• Individuals, charities, and private organisations should be made responsible for health care

• Public funding of health care should be restricted to health promotion and prevention of disease

• Central government's role should be restricted to policy formulation and technical guidance, with delivery of services left to the private sector and local authorities

• The private sector and non-governmental organisations should be supported to become the key providers of health and social services.1

In accordance with these principles, the central Ministry of Health abdicated service provision to local authorities and individuals. The idea was that people should be enabled to take responsibility for their own health through economic growth, which would lead to better household incomes and allow people to buy health care from privately owned health facilities.

But although Uganda's decentralisation has been praised, it has introduced major obstacles to service provision. This is because most of the funds distributed to districts have been …