The purpose of this study is to review the research literature on the effectiveness of contracting-out of primary health care services and its impact on both programme and health systems performance in low- and middle-income countries. Due to the heightened interest in improving accountability relationships in the health sector and in rapidly scaling up priority interventions, there is an increasing amount of interest in and experimentation with contracting-out. Overall, while the review of the selected studies suggests that contracting-out has in many cases improved access to services, the effects on other performance dimensions such as equity, quality and efficiency are often unknown. Moreover, little is known about the system-wide effects of contracting-out, which could be either positive or negative. Although the study results leave open the question of how contracting-out can be used as a policy tool to improve overall health system performance, the results indicate that the context in which contracting-out is implemented and the design features of the interventions are likely to greatly influence the chances for success.