Quasi-markets are markets which can be supervised and organisationally designed that are intended to create greater desire and more efficiency in comparison to conventional delivery systems, while supporting more accessibility, stability and impartiality than traditional markets. Quasi-markets also can be referred to as internal or planned markets.[1]
A market is a form of exchange mechanism of goods and services that is used to align supply and demand commonly by using the act of price adjusting. As such, a market also can be considered a self-adjusting financial incentive device that impacts the behaviour of each producer and purchaser so that both parties agree on the terms of an exchange. Quasi-markets are also an exchange system; they aim to comply with the characteristics of competitive markets by attempting to be self-correcting, inducement structures that impact purchasers and producers' behaviours. Quasi-markets differ, however, by possessing characteristics and aspects at both the supply and demand stages that are not shared in traditional markets.[2]
Outsourcing in the public sector creates so-called Quasi-markets for services that are primarily funded by taxes. The phrase Quasi-market emphasises the distinction between markets for tax-financed services and typical markets, specifically that the consumed services are paid for by a third party—the government. The existence of political aims that would not be met in a free market is the normative rationale for the government to pay. Most democratic countries place a premium on equal access to education and healthcare. Paternalism is also present; resource redistribution is conditional on the consumption of some services having a 'public' component. The government frequently provides finance to a large number of vendors, who then compete to provide the service in a quasi-market. By forcing suppliers to compete for customers and funding, this competition is intended to promote efficiency and quality.[3]
In the context of the supply, Quasi-markets are a market system, due to each producer competing to draw the maximum amount of consumers whilst competing with other producers. In the public sector, producers are often non-government companies (NGO's). Producers can also be segments or sectors of a specific firm that internally exchange their services inside a certain form of quasi-marketplace'; this is known as an internal market. it is important to acknowledge that internal markets are not open markets, this is because manufacturers with their goods and services will normally need third-party consumer permissions to enter a market.
In terms of demand,"Quasi-markets are structured to create and enhance consumer benefits and advantages, requiring producers to be responsive to the given alternatives. Inside the private sector's inner markets, pricing has a direct effect on internal resource allocation, although it does not directly have an impact on a firm's bottom line.[4]
The implementation of a Quasi-market suggests that each purchaser and producer are separate entities and that there are multiple producers. This process in which some companies are given consumer status and the exclusive perks that come alongside such status and where the firms are given consumer status and fewer limitations and boundaries, and encouragement of self-governance is referred to as a purchaser-provider split.[5]