Introducing Market-Like Mechanisms in the Public Sector: The Case of the National Health Service



The British National Health Service (NHS) is currently introducing far-reaching measures designed to introduce an “internal market” element into resource allocation processes previously dominated by planning and by line managerial heirarchies (CM 555, 1989). These are changes now apparent throughout much of the UK public sector but have a particular visibility in the NHS which is often seen as its “jewel in the crown.” While the NHS will continue to be publicly funded, component parts will be expected to behave more competitively within a market-like framework (it is argued) to reduce costs, provide incentives for performance, and improve quality.


Transaction Cost National Health Service Internal Market Seller Relationship Strategic Change 
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© Kluwer Academic Publishers 1993

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