A public choice approach to the economic analysis of animal health systems

This paper provides a retrospective examination of the evolution of economic theory of animal health service privatisation. The paper builds on a comparative analysis using economic theories developed in the human healthcare sector, developed during the 1960s and 1970s, in order to identify reasons for the failure of the process of privatisation of animal health care in many developing countries. The paper also explores ways of improving the current sub-optimal performance of animal healthcare services.The paper demonstrates that the economic analysis of animal health systems has moved from an outcome orientated perspective towards a more process orientated point of view. Thus, animal healthcare market is viewed in the broader context of where political interference, self-interested behaviour and other transaction costs are considered.The paper makes a number of conclusions and policy recommendations, including:privatisation of animal healthcare systems in developing countries, particularly in sub-Saharan Africa, has had very limited successthe application of economic theory to guide the process of privatisation of animal health systems varies in relation to several factors. The privatisation process cannot be applied in a homogeneous way. Influencing factors such as the political, physical and institutional need to be taken into accountthe role of government should be viewed at a broader level as coordinator of activities in the animal healthcare sectorin countries that have undergone privatisation, cost-containment measures could be applied in order to smooth the transition process to a privatised animal healthcare marketin countries where privatisation has been undertaken, efforts should focus on governance of the animal healthcare servicesthere is a need for further research in relation to the overall animal healthcare system’s organisation and financing, in order to enhance its efficiency and effectiveness.[adapted from author]