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.
