There has been a dramatic spread of market relationships in many low- and
middle-income countries. This spread has been much faster than the development
of the institutional arrangements to influence the performance of health
service providers. In many countries poor people obtain a large proportion of
their outpatient medical care and drugs from informal providers working outside
a regulatory framework, with deleterious consequences in terms of the safety
and efficacy of treatment and its cost. Interventions that focus only on improving
the knowledge of these providers have had limited impact. There is a considerable
amount of experience in other sectors with interventions for improving
the performance of markets that poor people use. This paper applies lessons from
this experience to the issue of informal providers, drawing on the findings of
studies in Bangladesh and Nigeria. These studies analyse the markets for
informal health care services in terms of the sources of health-related knowledge
for the providers, the livelihood strategies of these providers and the institutional
arrangements within which they build and maintain their reputation. The paper
concludes that there is a need to build a systematic understanding of these
markets to support collaboration between key actors in building institutional
arrangements that provide incentives for better performance.