1999; Dillinger 1994); and it faces a number of implementation problems in developing countries, not least of them being the difficulty faced by central health authorities—themselves reduced in strength and number by decentralization policies that typically reduce the size of central government—in monitoring the activity of local governments. So while formal devolution makes adaptation more likely, it makes central oversight more difficult and in turn can have a negative impact on the effectiveness of surveillance, health promotion and other efforts.

As implied above, the decision on which path to take is seldom a rational one, since decentralization is a political reform motivated principally by non-technical considerations (Smith 1997). The implications for the EPHFs therefore differ according to the path chosen to local political factors, including political factors _within_ the health sector (Collins 1989). Several generic issues do emerge. First, the economic characteristics of the EPHFs make them inherently poor candidates for devolution to local government control, particularly when local governments are weak. Even if this devolution occurs, it should not be accompanied by full fiscal responsibility for these functions, since the incentive environment facing local governments— even in industrialized countries such as the United States—typically leads to underfinancing of these functions. Second, and irrespective of the path chosen, decentralization policies should not be allowed to reduce the strength or capacity of central government agencies concerned with the EPHFs. Without strong central oversight, whether of deconcentrated field offices or of health officials in local government, the delivery of key public health functions will suffer. Central public health staff serve a number of important functions. In addition to receiving and interpreting information for the benefit of policy makers, they also have an inter-jurisdictional perspective necessary for effective coordination in disease control and play an important role in providing technical assistance and overseeing the activity of health staff at subnational levels (Das Gupta, Khaleghian, and Sarwal 2003). If these functions are compromised—as they very often are in decentralizing reforms, where the size of central government is reduced across the board and Ministries find themselves shrunk to a fraction of their former size—the EPHFs will fare poorly. Third, effective management of EPHFs—whether in a deconcentrated or devolved setup—requires better measurement instruments and attention to management. The management issues have been summarized already and will not be repeated here, except to highlight their special importance in administering a far-flung workforce (as in deconcentration). The measurement issues, however, are critical in both cases, since they condition the ability of central health authorities to effectively monitor, manage and support their subordinates in both hierarchical (deconcentration) or indirect (devolution) forms. In the latter case, the issue of measurement assumes added importance because of its links to central funds and the need to monitor how these funds have been used.

# **Section II: A Return to the Old Public Management?**

Given the extent of market failures in the health sector—particularly for public health functions—and the limited administrative capacity of governments in most developing countries, the role of NPM-inspired reforms is limited and a return to the “old public management” appears necessary on the surface. This does not imply that public health should be managed in a 11