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Privatization Decision: Public Ends, Private Means

NCJ Number
J D Donahue
Date Published
264 pages
This book examines the pros and cons of privatization of public services and examines various examples of privatization, including private prisons.
The first two chapters, which provide a framework for thinking about privatization, define the public realm, explore rationales for paying for goods and services collectively, and discuss the difficulties associated with spending decisions. Three chapters discuss issues of organizational structure and assess alternative institutional strategies for enforcing accountability in public tasks. The concept of "agency" arrangements is introduced and public and private organizations are depicted as variants of the basic agency relationship. Another chapter reviews the evidence on the economic advantages promised by profit-seeking organizations. A set of propositions indicates when privatization is likely to be beneficial and when not. Four chapters examine specific public tasks where privatization is being considered, tried, or has become the norm. The tasks examined are pentagon weapons procurement, service contracting at the city and county levels, prison privatization, and a recent initiative in American manpower policy that relies upon the private sector to define criteria for subsidized training programs. The book concludes that privatization is appropriate for some tasks and circumstances but not others, requiring that precise criteria be applied in making privatization decisions free of political pressures. Chapter notes, subject index.