Privatization

“Privatization” is the practice of the government contracting with private corporations to provide services that had previously been provided by the public agencies. This practice has been controversial for a number of reasons. Research has shown that the private sector is not necessarily less expensive or more effective at providing services traditionally provided directly by public workers. “Privatization” has also proven controversial in that, in some cases, the jobs have been shifted not just from the public sector to the corporate sector, but from US workers to overseas workers. EARN groups have conducted research on the effects of privatization of government services: from public school transportation and health care to prisons and Food Stamp programs. Following are links to reports by EARN groups and national organizations, and other important resources on this issue.

Recent EARN Group Reports:

California Budget Project

• Gambling on the Future:  Should California Privatize the State Lottery?  (June 2007)
• Soup to Nuts:  An Analysis of Selected Recommendations of the California Performance Review (August 2004)

Center on Policy Initiatives (California)

• Good Government: Protect City Services! (an index of reports)

Center on Tax and Budget Accountability (Illinois)

• Issue Brief on the Recent Lottery/School Funding Proposal (June 2006)

Kansas Action for Children

• A Case for Contract Reform:  The development of a single regional contract for foster care and adoption services in Kansas (July 2003)
• The Kansas Child Welfare System:  Where Are We?  Where Should We Be Going?  (2001)

Fiscal Policy Institute (New York)

• Privatization Without Competition Equals Huge Losses: How the New York State Government Wastes Hundreds of Millions of Dollars Without Increasing Service Quality (June 2005)

Policy Matters Ohio

• Reports on privatization since June 2000

Keystone Research Center (Pennsylvania)

• End Not Justified By Means: An Analysis of the R.S. Means New Castle County Assessment of the Economic Impact of Adopting Prevailing Wage Laws on New Castle County Government Construction Projects (September 2003)
• Fuzzy Math in Philadelphia: Edison Overstates Savings Possible Through Outsourcing School District Maintenance and Operations Work (March 2002)
• Pennsylvania Utilities: How Are Consumers, Workers and Corporations Faring in the Deregulated Electricity, Gas and Telephone Industries? (May 2001)
• The Pilot Privatization of Three State Health Centers: A Comparison of Evaluations (1999)
• Do Lower Prevailing Wages Reduce Public Construction Costs? (July 1999)

Center for Public Policy Priorities (Texas)

• Privatization of State Foster Care and Adoption Services: An Idea Whose Time Has Come or a Disaster in the Making?  (April 2007)
• Child Friendly?  How Texas’ Policy Choices Affect Whether Children Get Enrolled and Stay Enrolled in Medicaid and CHIP  (March 2007)
• Strengthening Child Protective Services (March 2007)
• Outsourcing Issues and Concerns in Public Benefits Administration (November 2006)
• Updating and Outsourcing Enrollment in Public Benefits: The Texas Experience (November 2006)
• Outsourcing Hurts the Poor (June 2006)

Center on Wisconsin Strategy

• Why Privatizing Government Services Would Hurt Women Workers (August 2001)

Institute for Wisconsin's Future

• Bad Business: A critical look at the plan to outsource health care in Wisconsin prisons (March 2005)
• Prevailing Wage Laws in Construction: The Costs of Repeal to Wisconsin (October 1995)

Links to National Resources

American Federation of State, County and Municipal Employees

• Privatization publications

Center on Budget and Policy Priorities

• Policy Considerations Relating to Privatization in the Food Stamp Program (October 2004)

Economic Policy Institute

• Privatization: Trends, evidence, and alternatives, An EPI conference — Thursday, January 11, 2001.  Audio Archive, Conference Materials
• Sclar, Eliot, The Privatization of Public Services: Lessons from Case Studies, Economic Policy Institute, 1997. Executive summary.  Full report available by purchase.
• Sclar, Eliot, The Emperor's New Clothes: Transit Privatization and Public Policy, Economic Policy Institute, 1989.

Good Jobs First

• Your Tax Dollars at Work . . . Offshore (July 2004)
• Jail Breaks: Economic Development Subsidies Given to Private Prisons (2001)
• Minding the Candy Store: State Audits of Economic Development (2000)

In the Public Interest

• What's at stake
• Information by state

National Center for the Study of Privatization in Education

National Education Association

• Resources on privatization

New Jersey Public Interest Research Group

• Save Our Turnpike (Information on toll road monetization)

Pennsylvania Public Interest Research Group

• Concerns about Turnpike Privatization

Texas Public Interest Research Group

• Six Public Interest Principles for Considering Private Toll Roads (May 2007)

Other Important Resources

Privatization bibliography, Mildred Warner, Cornell University

City Club of Portland, "Privatization of Government Services"

Dannin, Ellen J.  White Paper on Privatization, California Western School of Law.

Donahue, John D. The Privatization Decision: Private Ends, Public Means, Basic Books, 1989.

Dow, Mark "American Gulag: Inside US Immigration Prisons" (University of California, 2004).

Hudson, Nicholas, Ground Zero: The Laredo Superjail and the No Action Alternative, Grassroots Leadership Special Report, July 2006.

Kaplan, Dana, and Bob Libal, Progress or Profit? Positive Alternatives to Privatization and Incarceration in Shelby County, Tennessee, Coalition Against Private Prisons and Grassroots Leadership, 2006.

Prouty, Dennis, Privatization of Iowa Government, Iowa Legislative Fiscal Bureau, August 8, 1996.

Prouty, Dennis, Prison Privatization, Iowa Legislative Fiscal Bureau, September 1996.

Rosenthal, Marguerite G., Prescription for Disaster: Commercializing Prison Health Care in South Carolina, Grassroots Leadership, April 12 2004.

Sclar, Eliot, You Won’t Always Get What You Pay For: The Economics of Privatization, Ithaca, NY: Cornell University Press and the Century Foundation, 2000.

Singer, P.W., Corporate Warriors: The Rise of Privatized Military Industry, Cornell Studies in Security Affairs, 2004.

Singer, P.W., Wars, Profits, and the Vacuum of Law: Privatized Military Firms and International Law, The Brookings Institution, Spring 2004.

Smith, Steven Rathgeb and Michael Lipsky, “Non-profits for Hire: The Welfare State in the Age of Contracting,” Contemporary Sociology 23 (4), July 1994, 583-4.

Search for other EARN reports