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The Contracting Process: Issues surrounding contracting out include the cost of information and monitoring and the need to create a level playing field for competitive bidding between public workers and the private sector. "Privatization and Its Reverse: Explaining the Dynamics of the Government Contracting Process" Journal of Public Administration, Research and Theory, 14(2):171-190. This article shows that the level of contracting back in previously privatized services is significant among local governments in the US. : International City County Management Association. Between 19, the most common forms of alternative service delivery (privatization to for-profits and non-profits and inter-municipal cooperation) increased only slightly. They find both alternatives promote efficiency, but equity and voice are more associated with inter-municipal cooperation than privatization. These structural constraints limit the applicability of competitive approaches to local government service delivery. Using ICMA data we can track the dynamics of local government contracting.
Proponents claim that public sector workers are not harmed by privatization.
Displaced workers can be hired by contractors or transferred to other government positions.
The competition among communities forces them to provide public goods at the most efficient level. Direct government provision of goods and services, with its hierarchy and bureaucratic controls, may be needed precisely because it is less responsive to market influences. Due to the nature of public goods, which may be less profitable and more complicated to deliver, most public contracting has no competition (monopoly) or minimal competition among very few firms (oligopoly). 79-96 in State Devolution in America: Implications for a Diverse Society. They argue that in order to accommodate evolving societal land use needs, governments should use market based bargaining procedures that involve only direct stakeholders. “Public and Private Bureaucracies: A Transaction Cost Economics Perspective,” Journal of Law, Economics and Organization 15(1):306-342. Zerbe and Mc Curdy argue that the case for eliminating market failure through the internalization of externalities is flawed, and that governments should intervene in the marketplace only when they have the ability to lower transaction costs Sclar, Elliot. "All in the System: Organizational Theories and Public Contracting," Chapter 5 of You Don’t Always Get What You Pay For: The Economics of Privatization. Privatization is not only about economics; it is also about politics. Privatization also represents an overarching political agenda to alter the relationship between government and citizen. The article primarily focuses on systemic privatization. "Privatization in the United States: Theory and Practice." Political Science Quarterly. Henig traces the development of the theory and the practice of privatization in the United States until 1989-90. Starr also disputes two main arguments of privatization advocates: that with privatization 1) choice will increase and 2) costs will be reduced. Neo-classical economics focuses on the individual while structural approaches propose that larger social structures explain human behavior. "Reversing privatization, rebalancing government reform: Markets, deliberation and planning." Policy and Society 27: 163–174. Boyne offers an overview of various empirical studies that focus on the determinants of why certain local governments opt to contract out. Miranda and Lerner note the relatively high level of mixed (public and private) production for the same service and seek to explain how such redundancy could still be efficient. Advocating public policies based upon individual liberty and responsibility and a free-market approach, the Reason Foundation undertakes practical policy research. "The Politics of Privatization." Privatization 1996. Based on excerpts of several mayors' remarks, this article argues competition is the key to smaller government. "Creating the Right Institutions for Competitive Government." Privatization 1997. Public Private Partnerships in the Public Interest. Some indicate the public sector understands how asset valuation is done but fails to account for private sector desire to garner first mover advantage in a new market. In this paper, they propose the structured financial techniques (specifically debt swaps, sweeps, and raising internal valuations) used by private investors alter revenue estimates favorably for investors and lead to bid inflation. Market approaches to public goods provision emphasize the competitive state, and attribute limited degree of privatization to bureaucratic resistance.
Williamson examines public bureaucracy through the lens of transaction cost economics, pointing out that public bureaucracy, like other modes of governance, is well suited to some transactions and poorly suited to others. He argues that privatization is a new name for an old practice of government contracting. Kabeer offers a compromise between the two as a better model, using Bangledeshi women in the labor force as an example. Following the emergence of the New Public Management model in the late 20th Century, Warner argues that governments are now seeking a more balanced approach to public service provision by incorporating civic engagement as well as private market dynamics. "Privatization and the Market Role of Government," Briefing Paper, Economic Policy Institute, . This article uses national data published by the International City/County Management Association (ICMA) for the period 1982 to 1997 to show that service delivery by public employees remains the dominant form of service provision over the wide range of restructuring alternatives and that privatization has not increased dramatically. "How Much Privatization: A Research Note Examining the Use of Privatization by Cities in 19." Policy Studies Journal 24 (Winter): 632-640. Boyne aims to answer two questions: 1) To what extent do empirical studies provide an explanation of variations in service contracting? "Is Private Production of Public Services Cheaper than Public Production? They argue redundancy can enhance competition, provide a benchmark for costs, and ensure failsafe security in the event of contract failure. Their annual year book, Privatization, describes recent developments in privatization, including the following articles. The latter part presents the job-loss impact of privatization. This article describes how to create a level playing field between in-house public units and outside private providers, called "competitive neutrality," when setting up a public-private competition program. Others think the public sector lacks the information and the means to control the underlying drivers of asset value. The research suggests a presence of informational asymmetries and structural power imbalances within the bargaining context. Rural development theory emphasizes the uneven impact of market solutions in rural communities. "The Uneven Distribution of Market Solutions for Public Goods," Journal of Urban Affairs, 24(4): 445-459.
Most privatization research is based on case studies. Proponents argue that private firms are more efficient than government because of economies of scale, higher labor productivity, and fewer legal constraints. Savas, an advocate of privatization, describes the theory and practice of privatization and alternative service delivery arrangements, illustrating the appropriate use of various privatization techniques. You Don’t Always Get What You Pay For: The Economics of Privatization. Elliot Sclar lays out and critiques the standard market-based arguments for privatization, using local government case studies.
Privatization Research Paper Biographical Essay + Thesis
He faults government service provision for its monopoly status and inability to be responsive to citizens' needs, resulting in inefficient, one-size-fits-all services. He concludes that advocates of privatization should proceed with caution. This book outlines a theory for the potential of Coasian-style bargaining to work in complex urban contexts.The Ansaldo company, which produced boats, trains, airplanes, and naval equipment, had initially been nationalized by the Fascists in 1921 when it went into bankruptcy. The earliest Fascist manifestos “rejected private ownership and industrial interests.” Considering many of the first party members were ex-socialists like Mussolini himself, this should not be surprising.But once in power, the Fascists reversed themselves and called for an end to the “Collectivist State.” Bel notes that Mussolini was a tactician above all, and quotes historian James Gregor: “there was little that was conservative, liberal, or politically democratic about his most fundamental convictions.Organized labor, however, is very concerned about layoffs, erosion of wages and benefits, and decreased levels of union membership with privatization.Empirical studies show that privatization has not had a major impact on wages and working conditions (Pendleton 1997), but it can have significant effects on labor relations (Hebdon 1995).Search the database of case studies on local government restructuring in : Community and Rural Development Institute, Cornell University Hebdon and Gunn provide a brief overview of the privatization debate, at the level of local service delivery. It also introduces the experiences of other states and cities, and the special experiences gained in Britain.Another major issue is the impact of privatization on job security and employment.Williamson claims that there is an efficient place for public bureaucracy, but that each type of governance (markets, hybrids, firms, regulation), has its own place. He points to the political nature of the privatization agenda and questions its long term viability. : International City County Management Association. ICMA has been tracking local governments’ use of alternative service delivery approaches since 1982, finding that privatization trends have actually change little over the years. It evaluates two theories as to why privatization has not increased: government failure and quasi-market failure. Green reviews survey results of the International City/County Management Association for 596 cities, between 19, that gauged how much municipalities had privatized and their reasons for privatization. Statistical methods used in studies cited by public choice theorists lack critical control variables and a reliable measure of competition, and therefore lead to invalid conclusions. 2) Does the evidence improve our understanding of why different local governments adopt different policies? A meta-regression analysis of solid waste and water services," Journal of Policy Analysis and Management, 29(3): 553-577. 2002 "Applying Market Solutions to Public Services: An Assessment of Efficiency, Equity and Voice," Urban Affairs Review, 38(1):70-89. "Taking the High Road: Local Government Restructuring and the Quest for Quality." Pp 6/1 - 6/53 in Power Tools for Fighting Privatization, American Federation of State, County and Municipal Employees: . "The Privatization of Public Service: Lessons from Case Studies."Washington, D. This article presents several case studies that show public sector employees can provide a more efficient alternative to privatization: the Albany Department of Public Works, highways in Massachusetts, and Indianapolis Fleet Services. The authors use the examples of the Chicago Skyway and parking meter privatization to show how this happens in real-world situations. Using national data on US local government service delivery from 19, we analyze differences in local government service-delivery patterns by metropolitan status. Using national data on local government service delivery from 19, this article assesses the distribution of privatization and inter-municipal cooperation across localities in the metropolitan region and finds them most common among suburbs.What has risen most dramatically over the 1992-2002 time period is the use of mixed public/private provision. The study used two indicators of privatization, privatization levels, and privatization diversity. Boyne aims to reevaluate the empirical evidence on the effects of service contracting by United States local governments. "The Determinants of Variations in Local Service Contracting: Garbage in Garbage Out? The authors conduct a meta-regression analysis to empirically test if there is systematic support for the claim that private provision of water distribution and solid waste collection services achieves lower overall costs than public provision. "Contracting Back In – When Privatization Fails," chapter 4 pp 30-36 in The Municipal Year Book 2003. The authors assess the efficacy of market solutions for metropolitan public service provision by comparing privatization with inter-municipal cooperation and evaluating each on efficiency, equity and democracy grounds. Using detailed case studies, this report outlines two alternative strategies for improving local government service delivery—the "high road” which uses new management innovations to increase internal productivity, and the “low road” which focuses on downsizing and contracting out. Discriminant analysis suggested that structural features of markets are more important than the managerial capacity of government leaders in explaining lower rates of privatization among rural governments. While privatization is the most popular form of alternative local government service delivery, longitudinal analysis shows these contracts are not stable over time.[…] Mussolini had always been an elitist, as well as a singularly anti-democratic revolutionary.” Gaining elite support, consolidating party rule and personality-cult dictatorship, and concentrating the tasks of government on repression and militarism: Privatization has historically been driven by power politics.Introduction Privatization is a worldwide phenomenon. In recent years all levels of government, seeking to reduce costs, have begun turning to the private sector to provide some of the services that are ordinarily provided by government.