PUBLIC SECTOR INSTITUTIONS, POLITICS AND OUTSOURCING: REFORMING THE PROVISION OF PRIMARY HEALTHCARE IN PUNJAB, PAKISTAN IRAM A. KHAN * Office of the Auditor General of Pakistan, Islamabad, Pakistan Abstract: Lodhran/Rahim Yar Khan (RYK) model of primary healthcare is a home-grown experiment in Pakistan. The model envisaged transferring the management of primary healthcare facilities to a public sector NGO. The paper finds that through the re-alignment of interest groups, the model was replicated in several other districts of the province. It also examines the evolution of stakeholders’ behaviour, interest, position and influence in its implementation over a period of time. The study concludes that sustainability of the model remains doubtful unless public sector health bureaucracy is restructured and made to work effectively. Copyright # 2009 John Wiley & Sons, Ltd. Keywords: public policy; outsourcing; health planning; NGOs; Pakistan 1 INTRODUCTION The last two decades have seen a fundamental change in the shape of public organisations and the governance and management of societal problems, with governments becoming increasingly dependent on outside agents for the realisation of their policy objectives. This paradigm shift in policy is the result of a belief in the efficiency of private entrepreneurs to rejuvenate an ailing and inefficient public sector (Hood, 1991) as well as the emergence of complex and specialized social demands that governments are finding difficult to meet on their own. This is true for both the developed and developing countries. Outsourcing or contracting out has become a popular and preferred choice for the policy makers today. However, as Mills et al. (2002) point out, outsourcing is the beginning of a logical destination that eventually terminates in comprehensive restructuring of the public sector. Journal of International Development J. Int. Dev. 22, 424–440 (2010) Published online 16 March 2009 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/jid.1574 *Correspondence to: Dr Iram A. Khan, Office of the Auditor General of Pakistan, Audit House, Constitution Avenue, Islamabad, Pakistan. E-mail: iram.khan@fulbrightmail.org Copyright # 2009 John Wiley & Sons, Ltd.