This paper examines the effect thatexisting and proposed laws and regulations can have on thefeasibility and effectiveness of arrangements for resourceallocation and purchasing for the health sector indeveloping and transitional economies. The paper reviewseffects of laws and regulations on: the medical benefitspurchased, .the choice of medical provider, and .thetransaction in which care is provided. Specific reference ismade to recent experience in Russia, South Africa, Chile,and the Philippines, as well as possible precedents frommore developed countries. Categories of law and regulationdiscussed include: provider licensing, monopoly andcompetition legislation, liability for professionalnegligence, mandated benefits and permitted exclusions,antidiscrimination laws, appeals procedures and othermethods of asserting patient entitlement, rate setting andprohibitions on unauthorized provider charges, capacitycontrols and purchaser discretion in selecting providers,and patient confidentiality and collection ofpayment-related data.