Privatization Blog focuses on the outsourcing of government functions to private entities, usually through a contract. Always touted as a dramatic cost-savings measure, very often taxpayers end up paying more than they paid when the government performed the work in-house with public servants. Support for privatization is bipartisan - it was a featured component of President Clinton's "Reinventing Government" initiatives, and was an even bigger part of President Bush's policy, both domestic and foreign. In recent years, the scale of privatization has reached epic proportions, far more than most Americans realize - and the downsides are far more common, and more disastrous, than most people realize as well.
We believe there are concerns here that should trouble people from both political parties. Fiscal conservatives should recognize that, in reality, privatization usually makes government less efficient, less accountable, and more expensive. Civil libertarians should recognize that privatization means less transparency, less judicial oversight of the executive branch, less recourse for the intended beneficiaries of government services who now suffer unfair treatment, and more intermingling of large corporate conglomerates with the power of government.
On the most banal level, state governments tend to use privatization as a union-busting gimmick (to break the state worker's union, either ending the collective bargaining relationship or weakening the unions position). Whatever the value of state worker unions, the governors who resort to this measure are usually not candid about their true motives, and when followed through, the measure can increase unemployment in the state and result in a significant decline in the quality of government services. From the standpoint of costs, many of the contracts are given without true bidding (to a sole bidder with no competitors) or with only two or three bids, meaning there is not enough competition for the contracts to generate true "market discipline." The private firms often raise their prices significantly the first time their contract is up for review - and sometimes before - because they have "locked in" the relationship and no the government cannot easily switch to another contractor.
The Administrator and primary contributor for this blog is Dru Stevenson, the Helen and Henry Hutchins Research Professor at South Texas College of Law in Houston, TX. The other contributors are professors and law students. Please direct tips, comments, and press inquiries to Professor Stevenson.