The Privatization Decision

Abstract

In this article, the political environment of privatization and its impact on public management are examined in the context of the privatization of a state park in Georgia. The study specifically focuses on the actions of public managers in the privatization formulation and implementation stage. Public management capacity actually increased as a result of privatization. This is an outcome quite different from those reported by public management studies of other privatized services. Applying a principal-agent framework, this study yielded several lessons that may strengthen public managers’capacity to act as “smart buyers” of goods and services and to enforce accountability when managing contractual relationships. This study links theory to practice using a case study that allows a careful examination of the strategic responses of public managers confronted by largely political, as opposed to economic, pressures to privatize an already successful state park.

Does Contracting Achieve Better Performance for Democratic-Constitutional, Procedural Tasks? Evidence From the EEO Discrimination Complaint Process

“…However, according to contracting theories such as principal-agent theory and incentive theory, there is a great challenge for public managers when supervising contracts for difficult-to-measure services, as it is not easy to set clear standards and measures for tracking contractors' performance (Kelman, 2002). When performance can be easily measured and assessed in government contracting, it is easier for governments to hold agents accountable for what they perform (Van Slyke, 2003;Van Slyke & Roch, 2004). Conversely, when performance outcomes are difficult to measure and observe, this is likely to create a higher risk of principal-agent problems, which may lead to contracting failure.…”

“…In the context of FOIA, for example, "the use of federal FOIA contractors is not widespread, but if used judiciously to expedite old FOIA requests, they may improve the speed of the release process" (Piotrowski, 2007, p. 80). In addition, some evidence suggests that contracting out for social service programs is more effective when competition, trained state contract managers, and government managerial capacity exist (Romzek & Johnston, 2002;Van Slyke, 2003).…”

“…monopoly power in the private sector (Van Slyke, 2003). In addition, prisons managed by governments do a better job in some dimensions of quality that are relatively difficult to measure (e.g., prisoners' safety), whereas privately managed prisons have better performance in easy-to-measure dimensions of quality (e.g., prisoners' purposeful activities) (Alonso & Andrews, 2016).…”

“…In addition to evaluating the effects of contracting on the performance of DCP tasks, the existing literature suggests that staff expertise and task complexity are likely to affect performance and are thus included as control variables. First, in terms of staff expertise, previous studies have argued that public agencies are easily captured by contractors possessing high skill sets, when the agencies do not have employees with sufficient knowledge and skills to structure detailed contracts, and monitor and assess contractors' performance (Van Slyke & Hammonds, 2003). Second, task complexity can be referred to as "the degree of difficulty in specifying and monitoring the terms and conditions of a transaction" (Globerman & Vining, 1996, p. 579).…”

When markets fail to deliver: An examination of the privatization and de‐privatization of water and wastewater services delivery in Hamilton, Canada

“…A number of scholars have analysed the privatization of public services from different theoretical perspectives (Dore, Kushner, and Zumer 2004; Durant and Legge 2002; Globerman and Vining 1996; Van Slyke and Hammonds 2003). One of the most prolific and respected writers, Charles Wolf, has justified the privatization of public services using the theory of non‐market failure.…”