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User Charges for Health Care: A Review of the Underlying Theory and Assumptions

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  • Germano Mwabu

Abstract

The paper reviews the theoretical basis for the application of user fees in the public health sector in low-income countries with particular reference to the special characteristics of medical care as a commodity. The general equilibrium efficiency result of the market mechanism is shown to be the theoretical justification for the financing of health services via a system of user charges. If markets for all goods and services exist, and are perfect in a very strict sense, the welfare outcome of the price mechanism cannot be improved upon by any other resource allocation device.

Suggested Citation

  • Germano Mwabu, 1997. "User Charges for Health Care: A Review of the Underlying Theory and Assumptions," WIDER Working Paper Series wp-1997-127, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-1997-127
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    File URL: https://www.wider.unu.edu/sites/default/files/WP127.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ardeshir Sepehri & Robert Chernomas, 2001. "Are user charges efficiency- and equity-enhancing? A critical review of economic literature with particular reference to experience from developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(2), pages 183-209.
    2. AfDB AfDB, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 2256, African Development Bank.
    3. Germano Mwabu, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 172, African Development Bank.
    4. AfDB AfDB, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 2176, African Development Bank.

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