Tuesday, January 29, 2013

Sasha Volokh on Privatization and the Employee-Contractor Distinction

Alexander Volokh has a new article in the UCLA Law Review entitled Privatization and the Elusive
Employee-Contractor Distinction.  In it, he tackles an important - and hitherto neglected - aspect of government outsourcing, namely, the blurry line between contractors and employees that plagues employment law in general.  This is an important contribution to the literature and highly recommended.  Here is the abstract:
Does it matter whether prisons are managed publicly or privately — that is, whether prisoners are kept by state employees or by private contractors?

Yes, for all sorts of empirical reasons. Chiefly, we reasonably expect and observe and public and private providers will act differently and otherwise affect the real world.

But is there any inherent, normatively relevant difference between employee- and contractor-managed prisons, independent of such data-driven concerns? No.

The state is an abstract set of relationships; therefore, to act, the state must use agents of some sorts. Both employees and private contractors are private individuals; both do things forthe state in exchange for money; both have private purposes, as well as the discretion to follow those purposes sometimes, even contrary to the desires of the state. Private contractors can be unaccountable, but so can public employees; private contractors can lack legitimacy in the eyes of the public; but so can public employees.

The extent to which the public and private sector differ is an empirical, contingent question. It makes sense to favor or oppose privatization, and to treat the public and private sectors differently in the law, but the reasons for doing so must be based not on any inherent difference between sectors but rather on the empirical — and hotly contested — difference in howthe two sectors will act in the real world.

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