The Effect of Leadership Styles on the Performance of Community-Based Health Insurance Schemes in Public Health Institutions of Addis Ababa, Ethiopia
This study examined the effects of transformational, transactional, and laissez-faire leadership styles on the performance of community-based health insurance (CBHI) schemes, and assessed the mediating role of affective employee commitment in public health institutions in Addis Ababa, Ethiopia. An explanatory research design with a quantitative approach was employed, and data were collected from 385 respondents and analysed using Structural Equation Modelling. The findings revealed that transformational leadership had the strongest positive and statistically significant effect on both affective commitment and CBHI performance, while transactional leadership demonstrated a moderate positive and significant influence. In contrast, laissez-faire leadership showed weak or negative and statistically insignificant relationships with employee commitment and scheme performance. Furthermore, affective employee commitment partially mediated the relationships between transformational and transactional leadership styles and CBHI performance, whereas no mediating effect was observed for laissez-faire leadership. The results highlight the importance of active and supportive leadership practices in strengthening employee commitment and improving CBHI scheme effectiveness in public health institutions. The study contributes empirical evidence to the literature on leadership and healthcare performance in the Ethiopian context. Future research should expand the geographic scope beyond Addis Ababa and employ longitudinal research designs to better capture causal relationships and changes over time.
KeyWords: affective commitment, health insurance scheme performance. Laissez-faire leadership, transactional leadership, transformational leadership
