This dissertation investigates the context within which PPP programs are taking place in thernEthiopian heath sector and examines the extent to which the theoretically appealing principles ofrnPPPs, in general, and health service PPPs, in particular, are implemented in Ethiopia by takingrnthe health sector of Addis Ababa as a particular case. The current status and constraints of thernpublic health sector in terms of effectively addressing the health needs of citizens arerninvestigated with the view of involving the private health sector in addressing the challenges ofrnthe public health sector. Within the framework of New Public Management, the study attempts torncritically assess the policy and regulatory environment of health sector PPPs in Addis Ababa.rnInstitutional capacity for managing health sector PPPs and the extent of risk sharing and mutualrnsupport in the existing public private collaborations in Addis Ababaâ€™s health sector are alsornevaluated using the governance approach to PPPs as a conceptual framework.rnMixed concurrent triangulation methods with qualitative emphasis were applied as arnmethodology to address the research questions. Primary data was collected through detailedrnstructured questionnaire distributed to 242 purposively selected respondents in the health sectorrnof the city. In addition to the 24 key informant interviews conducted one-to-one with healthrnsector leaders, experts and experienced resource persons, secondary data was collected fromrnvarious sources including FMoH, AAHB, USAID-PHSP, statistical reports and many otherrnsources. The Data collected from multiple sources was analyzed using both qualitative andrnquantitative approaches giving due emphasis to the qualitative approach owing to the nature ofrnthe research questions under study.rnThe study generally indicated that the status and realities in the existing health system inrnEthiopia calls for collaboration with the private health sector which should be informed byrnappropriately designed PPP model. It was found out that while the public health sector inrnEthiopia as well as Addis Ababa is severely resource-constrained, which calls for activerninvolvement of non-state actors, the private health sector is not properly incorporated into thernhealth system. This dissertation argues that the policies, legal and regulatory frameworks of thernincumbent government and the Addis Ababa City Government in particular do not providernadequate room for the development of PPPs in the health service delivery. The study alsorndiscovered that the existing institutional framework and capacity of the public sector is notrnadequate and appropriate to manage both the existing and future PPP initiatives in the health sector of Addis Ababa. Although the existence of different types and levels of risks in PPPrninitiatives theoretically calls for fair risk sharing and government support to encourage thernprivate partner, no meaningful support is currently provided by the government to the privaternsector in Addis Ababa. The government offers little or no practical support to the private healthrnsector in the areas of subsidy, access to finance, tax relief and duty-free privileges and creationrnof demand for PPP delivered health services.rnFinally, the study recommends that the health sector of the city should be considered as a totalrnsystem that effectively involves the role and contribution of the private health sector. The policyrnand regulatory environment of health sector PPPs should be formally established which, thisrndissertation argues, will in turn address the issues of institutional capacity, risk sharing andrnmutual support in PPP initiatives. As the body of knowledge in PPPs in general and healthrnsector PPPs in particular is developing rapidly, this study also suggests further scholarlyrnresearch to be conducted in the area of applying PPPs within the developmental state politicalrncontext, promoting public interest goals in health sector PPPs