Privatisation of animal healthcare systems in developing countries,
particularly in sub-Saharan Africa, has had very limited success.
Introduced with inadequate transition time and too few resources, many
livestock owners either cannot afford or, just as likely, are unable to
gain access to the services they need. Poor livestock owners in remote
rural areas suffer the greatest disadvantage. This fact is undisputed
but, since privatisation, the primary focus has been on analysing the
performance of animal healthcare systems and few authors have studied
the underlying economic theories that have driven privatisation policy
nor examined in what ways these may have been detrimental.
This working paper examines how the economic analysis of animal health
services has evolved since the '90s. A comparison is made with economic
theories underlying the provision of human healthcare services where the
debate started much earlier (in the '60s). Special emphasis is put on
how these perspectives have influenced privatisation policy and, in
particular, based in general economic literature, how the way in which
'public goods' is defined affects their financing and provision.
Following this perspective, the role that governments should expect to
play in the animal healthcare sector post privatisation is also debated.
A relatively new approach to the economic analysis of animal health
services is therefore presented, one that has been propounded recently
by a number of economists working in this field. This economic theory,
based on the perspective of 'public choice' argues that the process of
decision-making may be highly significant in influencing efficiency and
effectiveness. Traditional 'outcome' analysis omits factors such as
self-interested behaviour and political interference. These may have
contributed to higher than expected 'transaction' costs and,
therefore, to the failure in many instances of the privatisation
process. Given that much greater attention than in the past should be
paid to issues of governance, governments in future may expect to act
not only as external agents with regulatory power but as part of the
nation's animal healthcare system with responsibility for defining
overall goals and harmonising and facilitating the market economy.
A two page executive summary is also available in addition to this
PPLPI, FAO, Rome, Italy, vi+31pp.