Classical versus relational approaches to understanding controls on a contract with independent GPs in South Africa.

Contracts have played a central role in public sector reforms in developed countries over the last decade, and research increasingly highlights their varied nature. In low and middle income countries the use of contracts is encouraged but little attention has been paid to features of the setting that may influence their operation. A qualitative case study was used to examine different dimensions of a contract with private GPs in South Africa. Features of the contract are compared with the notions of classical and relational contracts. Formal aspects of the contract such as design, monitoring and resort to sanctions were found to offer little control over its outcome. The relational rather than classical model of contracting offered a more meaningful framework of analysis, with social and institutional factors found to play an important role. In particular, the individual nature of GP practices highlighted the role played by individual motivation where a contract exercised little formal control. Due to the similarity of factors likely to be present, results are argued to be relevant in many other LMIC settings, and policy-makers considering contracts for clinical services are advised to consider the possibility of experiencing a similar outcome. Copyright 2003 John Wiley & Sons, Ltd.