Tuesday, December 11, 2007

Study Concludes that States Need Greater Oversight, Transparency on Privatization of Public Services

The oft-repeated mantra that private contractors can complete work better and more efficiently than government agencies is not demonstrable in a study published this week by the Progressive States Network. In fact, part of the problem of studying privatization of government, concludes PSN, is that data is not collected by governments for evaluating private company performance in the delivery of public services.

What PSN did find in its study of the piecemeal data is that privatization leads to lost tax dollars, weak oversight and lost institutional expertise, erosion of long-term financial gain as states sell off public assets, lost democratic accountability (toll-roads are a case in point), and political corruption. Those conclusions hardly support the panacea made of privatization during budget discussions. Fortunately, the drive to privatize has lost some steam since the 1990s.

PSN maintains that states need better measures for evaluation and more transparency so that voters can evaluate whether privatization actually works as its promoters claim it does. It also recommends the banning of "pay-to-play" contributions, in which private organizations that make political contributions are allowed to bid on government contracts. These are worthy recommendations that the State of Tennessee should implement, and soon.

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