The Two Different Concepts of Privatization Author(s): Ted Kolderie Source: Public Administration Review, Vol. 46, No.

4 (Jul. - Aug., 1986), pp. 285-291 Published by: Wiley on behalf of the American Society for Public Administration Stable URL: http://www.jstor.org/stable/976301 . Accessed: 22/07/2013 16:44
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and CURRENVTS SOUNDINGS

Concepts of Privatization The Two Different
of Minnesota Ted Kolderie,University
is currently of muchof the current a hottopic, much indiscus- * The usefulness Privatization discussion controversial. sionand highly aboutprivatization is impaired by a basic confusion have about definitions Professional journalsand business magazines and concepts. In particular, many been filledwitharticles about it. Wholebooks have observers fail to distinguish between the primary policy abouttheidea-some boosting beenwritten it,suchas decision toprovide a service and the ofgovernment secthe Public Sectoror Stuart ondary E.S. Savas' Privatizing decision toproduce a service. Either or function somecondemnFederalSpending; Butler's Privatizing both be "turned over" may to In the latprivate parties. ing it, such as Passing the Bucks by the American and effectiveness ofgovernment andMunicipal Federation ofState, County Employees. tercase,theefficiency In may be the improved. the former, objective ofsocial to study or to promote the Centers are beingformed equity be at risk. may put seriously nowthreatens todisplace cause.Privatization "partnerone topicwhere to ships"as thenumber peoplegather which business canmake talkaboutthecontributions to of problems which besetgovernment. thesolution is a liveissueon theagendasof state, Privatization privatization. Is itthepolicy It is becoming an issuein under decision toprovide andcity a county, governments. Or is it theadministrative thepastyear actiontoproduce someparticu- service? political a campaigns. During Is government to withdraw larlyunusualand controversial from itsroleas a proposals-especially, service? Or from itsroleas a seller? involving prisons-have brought moreto buyer? privatization We cannottalksimply andofthegeneral about a publicsector theattention ofthemedia Itis and a public. sector.Only a four-part closelycovered now, forexample, conceptof the secby theNew York private and has become a favorite Times fornewspaper tors-combining and producing, providing target government and magazine whotendto treat letus havea useful columnists, proposals and non-government-will discusfor privatization as assertions that the market can sionabouttheroles ofpublic andprivate andaboutthe replace government. of privatization. strategy The discussion, the reporting, and the comment An example willhelp. Let's takethe service called ifthere wouldbe more helpful were someclarity about security. There aretwopurecasesandtwomixed cases. what theterm privatization means. MuchofthediscusCase 1: Government does both-The legislature sion is quite unclear-largely becausetwo quite dif- writes thelawandprovides themoney; theDepartment ideasare being ferent expressed bytheuse of thesame of Corrections runs the prison.Neither is function word,and verydifferent interests withvery different private. implications forpublicpolicy are represented bythose Case 2: Production is private-TheCityof Bloomdifferent ideas. ington decides to provide security when thehigh school Thisarticle is an effort to sort outthose twoconflict- hockey teamsplayat thecityarena,and it contracts ingdefinitions of privatization. with Pinkertons fortheguards. Case 3: Provision is private-Government sellsto a WhatAreWe Talking About Privatizing? market ofprivate buyers. TheNorth Stars hockey team wantssecurity at Metropolitan SportsCenter, and it ina discussion Typically aboutprivatization itwillbe contracts with theBloomington city police. said thatthePostalService, or transit, or thefire serCase 4: Both activities are private-A department vice,or someother service should be "turned overto" store decidesthat it wantsuniformed security and theprivate sector.No useful discussion is possible in employs (or contracts privately for) its own guards. these terms. What does"turned over"mean? What pre- Government performs neither activity. wouldbe "turned cisely over"? Case 1 is thepure-case public sector. Thepolicy deciGovernment performs twoquiteseparate activities. It sionis governmental. A public at thesameorat bureau, is essential to be clearwhich activity wouldbe dropped a different level,produces theservice.
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Let's beginwith thesimpler of service activity production. Here privatization means that a governsimply is as troublesome as the ambiguNothing mental agency that hadbeenproducing a service is conous use of the word"providing." vertedinto, or is replacedby, a nongovernmental organization. Thiscan occureither where theagency is One distinct of government activity is toprovide for selling to private or where buyers itis selling to governits people. In otherwords:policymaking, deciding, ment. buying, requiring, regulating, franchising, financing, subsidizing. The British Example A secondand distinctly separate of governactivity ment may be toproduce theservices itdecides should be In Britain privatization means transferring to private provided. In otherwords:operating, delivering, run- parties theownership of a state thathad been industry ning, doing, selling, administering. producing very forprivate largely buyers. Each activity can be broken downintoseveral parts; Over the yearsa number of private industries had eachof which be privatized might separately. been socialized by successiveLabor governments, Theproduction of a service is thelesscomplicated of becoming British Steel,the Coal Board,British Gas, thetwo.It canbe divided, for into thelineser- British example, Air,British Telecom, etc.Thesestate industries viceandinto thesupport service; into thelaborandinto served each other and thegovernment, of course, but theequipment and facilities; intotheworkitself and didbusiness very with largely private firms and private intothemanagement of thework. Anyofthese can,in households. be divided turn, intoparts; thewaya city divide might Theseare nowbeing sold; sometimes to other firms, its refusecollectionamong severalhaulersor the sometimes (through a stock issue) directly to inmanagement of itspension funds among several banks. dividuals, sometimes to theworkers. This "selling off Theprovision ofa service is more complicated. A ser- thefamily silver" has beenbothpopular (especially the viceis publicly or socially provided (a) where thedeci- sale of publichousing units to their occupants, which sion whether to have it (and thedecisions aboutwho hastransformed tenants intoowners) andprofitable for shallhaveitand howmuch ofit)is a political decision, thegovernment. (b) when government arranges fortherecipients notto As stateindustries, these enterprises had beenunder have to pay directly forthe service themselves, and pressure to holddowntheir prices. Thus,yearbyyear, (c) whenthegovernment selects theproducer thatwill deficits arosewhich thegovernment had to cover. Year serve them. byyear, theeffort to limit thesubsidy, as a wayto force Theservice is privately provided (a) where individuals these industries to reduce their costs, had failed. So the and nongovernmental organizations make theirown Thatcher government decided to privatize these service decisions whether or notto haveit, (b) where, if they producers. As private organizations, theseindustries chooseto haveit,they payfor itinfull outoftheir own willhaveto earntheir revenues and willbe forced to resources, whatever thesemaybe, and (c) where they control costs and improve services in waysthat,as select theproducer themselves. publicorganizations, they werenot. Clearly there can be mixed cases. Government may makea service available butletcitizens decidewhether TheAmerican Application to useit;orthefinancing maybe shared between public and private, with userspaying a partand government A fewproposals forthe sale of government entera partof thecost;or someindividuals paying maybe prises haveappeared here.Conrail is to be sold. Presiaskedto pay thecostin fullthemselves while govern- dentReaganhas proposed thesale of others, including ment paysthefullcostforothers; or government may power distribution facilities and selectedpetroleum paythecostbutallowtheuser to select thevendor, and reserves. But in this country (thoughcalled public so forth. utilities) the major energy, and comtransportation, Services provided publicly maybe financed through munications systems (exceptfor the Postal Service, taxes, as schools are. Butgovernment also usesnontax TVA, and such distribution systems as Bonneville
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Case 2 is immediately as the-stillconrecognizable of contracting. troversial-system Case 3 is lessfamiliar, of governalthough examples ment agencies to private arein factfairly selling buyers common. Case 4 is, again,wellunderstood as thepurecase of private agencies to private selling buyers. The vocabulary can be confusing. is as Nothing troublesome as theambiguous use of theword"providing."Somepeopletalkin one breath aboutsociety providing medical care fortheelderly and in thenext describe as theproviders. doctors Avoid suchconfusion:Thatwaymadness lies.

devices.One of theseis regulation: Government provides us with cleanrestaurants byrequiring their owners to clean themat theirown expense.Franchising is another: Government to all partsof a city provides a uniform levelof service a monopoly by creating that permits a utility toaverage itsprices, some overcharging residents so as to subsidize others. Withthisdistinction clear,we can now look separately at whatit means to privatize bothprovision and production.

Privatizing Production

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The scopefor Power)havebeenin private ownership. the kind of privatization underway in the United sellers Kingdom-transforming government-owned of private services back into privately-owned sellersof in thiscountry. private services-is limited Here privatization has come to mean mainly the government moreto private turning forserproducers vices for whichgovernment remains and responsible which government continues to finance. It has become a newnameforcontracting. simply is not new in American itself Contracting government. inpublic It is traditional works at all levels, andit intherapid hasbeencommon ofhuman growth services the1960s.Whatis newis theproposal since nowto exand to applyit to service pand the practice areas in which it had notpreviously beenconsidered. There are proposals,for example,that a county board might privatize its hospital overthemanagement by turning (or ownership) to, say, Hospital Corporationof America; or thata citymight retain a private firm to finance andtooperate, as wellas todesign andtobuild, a newwaste-water-treatment plant;or thatTennessee intheCorrections might bring ofAmerica Corporation to runitsstate prisons. Thesefacilities and services wouldbe turned overto private inthesense organizations that private organizationswouldrunthem (thatis, becomeresponsible for service But the responsibility production). forprovision,thepolicy side,wouldremain governmental.

monopoly publicbureauor involves also theintroductionof competition among producers. If thechange is simply from one monopoly supplier to another, thenneither costnorperformance is likely to change much.The government as buyer very is still caughtwitha sole sourcearrangement. Some of the in Britain privatization has been of thissort.British Telecom has beensoldto private forexample, owners, but othercommunications have not been companies allowed to enter themarket to compete with it.It freely is privatization without competition. An argument can alwaysbe heardforthis.Private andpublic alikearequickto tellyouhow organizations muchbetter they couldserve you if onlythey did not have to competefor yourcustom.But an effort at privatization shouldtryto makethe producers competitive. (Efforts are needed to makeeven periodically privateindustries competitive. The deregulation of railroads, aviation,over-the-road trucking, banking, health care,and telecommunications in the 1970sand 1980swas suchan effort.) TheQuestion of"Creaming" A common charge against privatization is that it will result in service goingonlyto theeasyand profitable customers,while the difficultand unprofitable customers are neglected. This reflects a failure to distinguish between providing andproducing. Creaming is a problem when producers sellto private buyers. It should notbe a problem where government is thebuyer. Government cangetthe service itwants topayfor.It will havetopayfor what it wants. Butifgovernment wants rockets to themoon,it can get rockets to the moon. If it wantsdailymail delivery to Lost Butte, Montana, it can getdailymail delivery to LostButte, Montana. Government will havetobe a smart buyer. Creaming, likecorruption, can occur ifthegovernment is careless. Private contractors and publicbureaus alikemaytend to avoidthedifficult work required inthepoorer neighborhoods of a city. The government must be careful to specify thework it wants done,and it must inspect the work to makesureitgetswhatit wants.

Issuesin Privatizing Production

The debateaboutthisidea of privatizing production is nowfully under way.While ithasitsideological side, mostof it is intensely practical. It is very much a clash between competing producers, bothof which wantthe government's business. The organizations of government employees, which wouldliketo holdon to thebusiness, sayprivatization willmeanpoorer service at higher cost.The American Federation of State,County and Municipal Employees has been running ads in the magazines read by city public-works directors, warning about thedangers of andhasmailed contracting, copies ofPassing the Bucks to 5,000government officials. Private firms thatwouldliketo getintothebusiness The Question ofCorruption saythatprivatization (contracting) offers better service at lowercosts.In 1985a number of firms created the Whena government buys from private producers, efPrivatization Council,withoffices at 30 Rockefeller forts must be madecontinually to detect and suppress Plaza, NewYork.Thecouncil sponsors conferences and anti-competitive behavior and theuse of publicoffice publishes a journal,thePrivatization Review, to pro- forprivate profit. The sameis true when theproducers motethisconcept of privatization. are public. The problem is complex,falling roughly into six We tendnotto talkaboutcorruption in therelationparts. shipbetween elected officials andtheir bureau. Butthis is alsoa noncompetitive arrangement, with thepotential forproblems (if, forexample, wageincreases are exThe Question ofCompetition changed for contributions at campaign time). Onegood way to protect the publicinterest is to separate the Whatactually happens as a result of a shift to con- governmental providerfrom its producers-public tracting depends largely on whether thechange is only bureauor private contractor-through free-choice-ofthe substitution of a monopoly private supplier fora vendor or voucher arrangements.
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The Question ofCost Where is introduced, competition costsare normally expected to fall.Thus,privatization oftheproducer side be appealing should notonly to business firms for eager a chance to sellto thegovernment butalso to managers frustrated and unresponsive by a costly publicbureau and to citizens mademore eagerto see service effective an increase in their without taxes.And probably competition does reduce costsperunit. As the discussion concern goes along,however, is about a cost-increasing arising of contracting. effect This comesthrough in thebook,Privatizing strongly FederalSpending head of domestic by Stuart Butler, studies at theHeritage policy in WashingFoundation ton.He argues thatcontracting "the spending expands coalition" thatdrives up thefederal budget.
Moving the supply (producer) functionout of government may replacea mutedbureaucratic forbigger witha wellpressure programs financed,private-sector campaign. This significant drawbackmeans that contractingshould be viewed with caution as a means of privatization. can lead to moreefficient Contracting but government, it does not guaranteesmallergovernment.

is notlostin thiskindof privatization-unless munity thepubliccharacter of a service on its being depends delivered by a specifically governmental producer. In someservice areasand forsomepeople, itmay.Thisis a reasonfor the resistance clearly to contracting of prison services. Also,to mostpeople,public education meansa schoolrunbygovernment. On theother hand,no strong exists feeling that today the publiccharacter of the program is lost if people needing medical caredo notgo tothecounty or hospital ifpeopleneeding arenotrequired housing to liveinthe project ownedbythelocal housing authority. Whenwe'retalking about nongovernmental simply producers, the social commitment to a program is generally maintained and,as wehaveseen, mayevenbe enlarged. kind Hence,this of privatization doesnotput community at risk. seriously The danger to community comesfrom theother major concept of privatization, to which we nowturn.

theProvision Privatizing ofService

It is quitepossible, of course, to privatize thepublic rolein theprovision of benefits and services. Government would simply withdraw from (or reduce) its roleas How youviewcontracting depends on whatyouare buyer, regulator, standard setter, or decision maker. to do. If youthink trying programs notto be ex- People ought (or certainpeople for certainservices thus panded, youwillprobably want to resist itsuse. If you privatized) would then be on their own to decide favorlarger publicprograms, you mayfindit highly whether ornotto havea service andtopayfor itshould strategic to expand theuseofthis form ofprivatization. they decide they want it. A goodexample ofthis justnowis inthefield ofcorSincetheessence ofgovernment liesinthis first funcrections. One groupwants to putmorepeoplebehind of tion, deciding what it will provide-what it willrebarsand is advocating with contracts firms private to quire and buyandmakeavailable; where andwhen and buildand operate state prisons. Another thinks thein- to whom and to what standard-this is the real (as of lockingup people (especially, dustry kids) has Butler says, complete) privatization. already grown toolarge andwants to block contracting. For thosewhocareaboutgovernment maintaining a The two groupsdisagree-except in theirbeliefthat strong policy role, health care is not privatized when the contracting wouldmeanmore jails. county boardcontracts themanagement of thepublic hospital to a private firm, when it sells the hospital to a TheQuestion ofControl private firm, or evenwhenit closesthe hospital and care buys from the other hospitals in the community. Opponents of contracting arguethata government toprovide istruly privatized when the has better control whenit ownsitsoperations; thatis, Theresponsibility county board says it will no longer pay for the care of when the workers are permanent employees. Prothemedically indigent. ponents argue that control is better when operations are handled bycontract, becauseon contract-since an affirmative decision is required periodically to continue The Methods forPrivatizing Provision therelationship-the producer is always at risk. Government can withdraw from theprovision ofserThe Question ofCommunity vicein a variety of ways. it can withdraw First, from theproduction of a serThe term privatization-even if onlyof service pro- viceandnotat thesametime redesign that program into duction-suggests to somepeoplethatthepublicpur- a purchase-of-service arrangement. This is load shedpose of a program is somehowlost. Proposalsare ding, inthevocabulary ofalternative service delivery. A drawn quickly intoan ideological debate-attacked as thatsimply city stopped plowing snowout of alleys or further eroding the sense of community in contem- stopped inspecting restaurants would be privatizing proporary and forintensifying society the individualistic duction and provision simultaneously. ethic of ourtime. Sometimes this occurs. Sometimes itdoesnot.When Hereagaintheerror liesinconfusing production with government reduced itsrolein theproduction of housprovision. So farwe have been talking onlyabout a ing (i.e., stoppedbuilding morehousing projects), it privatization of theproducer role.The senseof com- redesigned publichousing intoa program in which it

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pays the rent for low-income families in privatelyowned houses and apartments. can reduceor withdraw Second, government fromits role as providerby introducing fees and chargesfor a it continues service to produce.In manycases thefinanwillstillbe sharedbetween cingresponsibility taxpayers and users. But the proportion paid by userswill rise. It is a kind of creeping privatization. Charges can be introducedat a flat rate for all, regardless of abilityto pay. Or theycan be introduced for some people and not for others,or set at a higher rateforsome than forothers.Discounttransit faresfor theelderly, slidingfeescales forday care, and checksto some people forwinter heatingbills(whileotherpeople pay fullrate) come quicklyto mind. A similarprivatization occurs as tax liabilityis extendedto coverthecash payments received and thecash value of services receivedunderbenefit and entitlement programs.Above a certainincome level, for example, social securitypaymentsare now taxable, and Colorado's Governor RichardLamm has suggested thisas a generalpolicywherethe pressureto offerservicesand benefits universallyin the first instance cannot be resisted.

The Reasons forPrivatizing Provision two verydifferent Actually, interests, both deeply
Who would want to do anything so cold-hearted?

Privatization can servea usefulpurpose. It also carries some dangers. The effort should be to secure the former whileavoidingthe latter. A reasonableprogram would involvesome privatization of service production combined with some privatization of serviceprovision. Implementationof such a strategywould focus Thesecond andmore conspicuous oftheforces arises mainlyon (a) maintaining the rightand enlarging the fromtheeffort to restrain publicexpenditure-torelate responsibility of people to provide for their needs needs and wants to what the city,state,or nation can privately, where they can and where theywish; and, realistically affordto pay. wheregovernment is responsible, (b) enlarging the opThe combination of client advocates, themedia, and portunity forelectedofficials and forcitizensto secure the political process has worked powerfully to turn those servicesfromprivateproducersas well as from needs into rights, rights into entitlements, entitlements public agenciesif theywish. intoprograms, and programs intobudgets.At thesame First,in thearea of service provision,sucha program time, the combinationof international and interstate would involve:

concerned about equityand about community, are comingtogether to reduceor limit theroleof government as providerin Americaand in otherwestern countries. The firstof the two effortsto limit the scope of government risesmainlyfromsocial and politicalconcerns. In recentyearssome representatives of the poor and disadvantagedhave increasingly resistedgovernmenthousing,healthcare, and othersocial-welfare programs.For themeffects are whatcount; not intentions. For the people theyrepresent, programs have too often operated mainly to enlarge the income, status, and powerof the industry of bureaucratic and professional serviceproducers, whether governmental or private. These advocatesresist theidea thatwe findour community through politicsand resistthe extension of law and regulation that steadilydeprivesnongovernmental and nonprofessional institutions of the right to care for themselves and foreach otherin waysthatprivate communitiesalways have. Their efforts to maintainthese rights forindividuals, families, and voluntary organizations form an importantpart of the support for privatization.

economic competition,taxpayer resistance,and the need to stimulate and investment entrepreneurship has workedpowerfully to constrain theresources thatcome into the economyand the amount available for public serviceprovision. In almost everycountry,public serviceshave come under pressure. Something has had to give. One responsehas been to reduce servicesacross the board, makingno distinctions among users.Anotheris to shift from a universalist to a selectiveapproach in social policy-that is, from a policy that makes services available to everyone at no chargeregardless of ability to pay to a policythatasks thosewho can affordto pay to do so and reserves the limitedpublic resourcesfor those who genuinely cannot. The latterapproach, privatization, enhances equity betterthan an across-the-board reductionin service levels. It also eases the concernabout what could happen to democratic in a society institutions in whichmore than half of the people have theirincomes politically determined. The people who wantto limitwhatgovernment provides are not necessarily cold-hearted.They are skepticalabout publicofficials'tendency to justify programs in termsof intentions. They worry about government's to driveout itscompetitors ability withtheoffer of free services. Theyseekto reducetheproportion of decisions made in a politicalprocesswhichtheysee as incapable, realistically, of resisting the pressurefor irresponsible decisions to pay for services with other people's resourcesand to increase the proportionof decisions made in a processwhereprivatepartiesmake responsible decisionsabout the use of theirown resources. The clear requirements for the success of a social policy of this sort, however,are almost certainly the provisionof an adequate incometo the poor-through transfers or throughwork-and the maintenanceof standardsto those whose serviceis being community paid for socially. It is hard to see that the effortat privatization is yetadequatelysensitive to the practical and ethicalimportance of thisidea of social equity.

A Reasonable Program for Privatization

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* Being selective. Targetingeligibilityto those in need.

sets forpeople of low income. * Taxingbenefits, wherebenefits are granted universallyin thefirst instance.(All of theabove willprivatize financialresponsibility and thus help restrainexpenditure.)

* Continuing tousefeesandcharges with income off-

and managingthe eligibility as demand for the service changes.Commonly,today,programs fixtheeligibility so thatwitha risein demandit is theappropriation that becomes the variable.

* Fixing-appropriating-the forprograms revenues

In thiscountry, privatization has come to be a new name forcontracting. simply

* Introducing voucher or otheruser-side systems subsidiesthatprivatize and thereby depoliticize thevendorselectiondecision wherethe serviceis governmentally paid and evenwhereitis governmentally produced.This will guard against the problemsthat can arise in contracting, whereelectedor appointedofficialsselectthe vendor.It willalso indicatemoreclearlythesortof service people reallywant. Second, in thearea of service production,such a programwould involve: * A policy to avoid sole sourcing,whether the supplieris governmental or private.This will ensurecompetition.A public-bureau arrangement is essentially a long-term, noncompetitive, sole-sourcecontract.(Note thatit is possibleto have competition without privatization. A government can contractwith other governments,and free-choice-of-vendor arrangements can be introducedwhere the choice is simplyamong public agencies.Governor RudyPerpich'sproposalin 1985for open enrollment among public school districts in Minnesota is an exampleof the latter.) Breakingup a serviceintopieceswillenlargetheopporto use different tunity kindsof suppliers. This willallow changes to occur more graduallyand thus lower both the political pain and the risk involved in service redesign. * Divestiture. A publicpolicybodythatservesalso as the board of directors forthe public agencyproducing

itsservice is caught in a dual rolewhich can at times becomea conflict of interest. therolesof Separating provider and producer can makeit easierto privatize production. This will be usefuleven in a generalpurposegovernment organization, the elected freeing boardto concentrate on policy and on waysto reduce the cost and to increase the qualityof service. It is especially neededin single-purpose agenciessuch as transit commissions and publicschooldistricts. * Capitation. Payingtheproducer a lumpsum,up and allowing front, that organization to keepwhatever it does not needto spendintroduces an incentive for producers to innovate. Teachers, forexample, saythat ifgiven thisincentive they wouldmovequickly toward peer-teaching, independent study, parent involvement, theuseofcommunity resources, differentiated staffing, and newlearning technology. * Co-production. In voucherarrangements clients can do much of thework themselves. Theyneednotbe required to spendthe money on professional service. This willencourage strategies of prevention and selfhelpthat canbe,at thesametime, lesscostly for payers and moresupportive forusers. In Conclusion' Sucha program ought to be possible. Forthemoment, however, both theprivate leadership andthepolitical leadership aremired intheold ways of thinking. Both are boggeddown by traditional conceptsof government thatare insufficiently sensitive to needsforeconomy and responsiveness and byconcepts of a private rolethatare insufficiently sensitive to the needforequity. A newconcept, combining equity in theprovision of services with competition intheir production, hasyet to be articulated politically. Ted Kolderie, a graduate of Carleton Collegeand of the WoodrowWilsonSchool of Public and International Affairs at Princeton University, has been a newspaper reporter and editorial writer fortheMinStarand Tribune neapolis and executive director ofthe Citizens Leaguein theTwinCities area.He nowdirects thePublicServices Redesign Projectin theHumphrey Institute, University of Minnesota.

* An effort to disaggregate theelements of a service.

References

Much of the literature on privatization is in articlesand papers. A particularly extensive and usefulbibliography can be foundat theend of the generally negativeview of privatization, in the articleby Paul Starr, "The Meaning of Privatization," in: Project on the Federal Social Role, Working Paper 6 (Washington: The NationalConference on Social Welfare,1985). The Local Government Center,a projectof

the Reason Foundation (1018 Garden Street,Santa Barbara, CA) keeps trackof examplesof efforts at privatization. In many respectsthe fullest,most politicallysophisticated, and therefore mostimportant treatment of thesubjectis in: StuartButler, PrivatizingFederal Spending, A Strategyto Eliminate the Deficit (Washington: The Heritage Foundation, 1985). Another effortto

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FROM THE PROFESSIONAL STREAM the distinctions clarify the meaningof privatization, following made by Vincentand Elinor Ostrom,is: E.S. Savas, Privatizing thePublic Sector (Chatham, NJ: Chatham House, 1982). Two particularly sensiblecomments by personslong in and around governmentand public administrationare: Alan K. Campbell, Testimony Beforethe Texas Commissionon Economyand Efficiency

291 (Austin,TX: January 23, 1986), and Dick Netzer,"Privatization," in Setting Municipal Priorities (New York: Columbia University Press, 1985). A summary of the varying approaches to privatization, in Britain and in othercountries,appeared in The Economist, (December 21, 1985), p. 71.

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