You Don't Always Get What You Pay for: The Economics of Privatization

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Today, nearly all public services-schools, hospitals, prisons, fire departments, sanitation-are considered fair game for privatization. Proponents of privatization argue that private firms will respond to competitive market pressures and provide better service at lower cost. While this assertion has caused much controversy, the debate between both sides has consisted mainly of impassioned defenses of entrenched positions.

In You Don't Always Get What You Pay For, Elliott D. ...

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Overview

Today, nearly all public services-schools, hospitals, prisons, fire departments, sanitation-are considered fair game for privatization. Proponents of privatization argue that private firms will respond to competitive market pressures and provide better service at lower cost. While this assertion has caused much controversy, the debate between both sides has consisted mainly of impassioned defenses of entrenched positions.

In You Don't Always Get What You Pay For, Elliott D. Sclar offers a balanced look at the pitfalls and promises of public sector privatization in the United States. By describing the underlying economic dynamics of how public agencies and private organizations actually work together, he provides a rigorous analysis of the assumptions behind the case for privatization.

The competitive-market model may seem appealing, but Sclar warns that it does not address the complex reality of contracting for government services. Using specific examples, such as mail service and urban transportation, he shows that ironically privatization does not shrink government-the broader goal of many of its own champions. He also demonstrates that there is more to consider in providing public services than trying to achieve efficiency; there are issues of equity and access that cannot be ignored.

Sclar believes that public officials and voters will soon realize the limitations of "contracting out" just as private corporations have come to understand the drawbacks of outsourcing. After examining the effectiveness of alternatives to privatization, he offers suggestions for improving public sector performance-advice he hopes will be heeded before it is too late.

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Editorial Reviews

Booknews
In an assessment of the pros and cons of public sector privatization, Sclar (urban planning, Columbia U.), who is affiliated with the Economic Policy Institute in Washington, DC, warns that outsourcing services may not result in leaner US government. He examines alternatives and offers tips for public sector reform. Annotation c. Book News, Inc., Portland, OR (booknews.com)
Diana Henriques
…this book demonstrates with one delicious and well-documented example after another, you don't have to be corrupt to botch public contracting…just being dogmatic and unimaginative will suffice.
The New York Times
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Product Details

  • ISBN-13: 9780801437335
  • Publisher: Cornell University Press
  • Publication date: 7/28/2000
  • Series: 5/21/2003
  • Edition description: New Edition
  • Edition number: 1
  • Pages: 208
  • Product dimensions: 6.18 (w) x 9.20 (h) x 0.73 (d)

Table of Contents

Foreword vii
Acknowledgments xi
Chapter 1 The Urge to Privatize: From the Bureaucratic State to the Contract State 1
Chapter 2 What Is the Public Buying? Identifying the Contracted Public Good 20
Chapter 3 Public vs. Private Production: Is One Better and How Would You Know? 47
Chapter 4 What's Competition Got to Do with It? Market Structures and Public Contracting 69
Chapter 5 All in the System: Organizational Theories and Public Contracting 94
Chapter 6 Restructuring Work: The Relational Contract 130
Chapter 7 The Privatization of Public Service: Economic Limits of the Contract State 151
Bibliography 169
Index 177
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