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This paper draws parallels between the market trend in the English NHS and Polanyi's (1957) The Great Transformation: The political and economic origins of our time, Beacon Press: Boston (originally published in 1944 in the United States as The Great Transformation, Rinehart: and Co: New York, and in 1945 in England as Origins of our time, Gollancz: London) account of how the rise of markets provokes a self-protective counter-reaction that tries to re-embed economic relations in social relations. We report findings from a qualitative study of NHS contracting, which examines the recent move to harder-edged contracts with greater use of financial penalties and incentives. In practice, use of these techniques tended to be confined to nationally-mandated sections of the contract rather than emerging from local bilateral agreements, and when things went wrong the parties relied more on cooperative behaviour than on the provisions of the contract to find solutions. Making the current contracting system work depended more on existing relational networks than on the incentive structures created by recent 'marketisation' initiatives, but the inability of the market to evolve as expected has encouraged policy makers to publish plans for further radical reforms. [ABSTRACT FROM AUTHOR]

The authors describe the incremental approach to the marketisation of the English National Health Service (NHS) since the introduction of an 'internal market' in 1990 until the 2010 White Paper, 'Equity and Excellence: Liberating the NHS', and the subsequent Health and Social Care Bill published in January 2011. The introduction of a competitive market for a universal, tax-financed health system requires fundamental changes in regulation in order that market bureaucracy can be substituted for direct management. The components of reform are insufficiently captured by the framework of hierarchies and networks in new public management theories of decentralisation. [ABSTRACT FROM AUTHOR]