Health governance: principal-agent linkages and health system strengthening

Governance is increasingly recognized as an important factor in health system performance, yet conceptually and practically it remains poorly understood and subject to often vague and competing notions of both what its role is and how to address its weaknesses. This overview article for the symposium on health governance presents a model of health governance that focuses on the multiplicity of societal actors in health systems, the distribution of roles and responsibilities among them and their ability and willingness to fulfil these roles and responsibilities. This focus highlights the principal-agent linkages among actors and the resulting incentives for good governance and health system performance. The discussion identifies three disconnects that constitute challenges for health system strengthening interventions that target improving governance: (1) the gap between the good governance agenda and existing capacities, (2) the discrepancy between formal and informal governance and (3) the inattention to sociopolitical power dynamics. The article summarizes the three country cases in the symposium and highlights their governance findings: health sector reform in China, financial management of health resources in Brazilian municipalities and budget reform in hospitals in Lesotho. The concluding sections clarify how the three cases apply the model's principal-agent linkages and highlight the importance of filling the gaps remaining between problem diagnosis and the development of practical guidance that supports 'best fit' solutions and accommodates political realities in health systems strengthening.