Privatization Of Public Social Services A Background Paper

Topics: Welfare, Private sector, Voluntary sector Pages: 9 (8239 words) Published: March 15, 2015
Privatization of Public Social Services: A Background Paper




10/03/15 01:16



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Document date: October 15, 1997
Released online: October 15, 1997

Families and Parenting

1. Introduction


The purposes of the paper are to provide a general overview of the extent of privatization of public services in the areas of social services, welfare, and employment; rationales for privatizing service delivery, and evidence of effectiveness or problems. Examples are included to highlight specific types of privatization and actual operational experience. The paper is not intended to be a comprehensive treatment of the overall subject of privatization, but rather a brief review of issues and experiences specifically related to the delivery of employment and training, welfare, and social




The key points that are drawn from a review of the literature are:

Health and Healthcare

Measurement / Mgmt
Poverty, Assets and
Safety Net
Race, Ethnicity, Gender
Retirement and Older
Washington D.C.

Health Policy Center
Income & Benefits
Policy Center
Development and
Justice Policy Center
Labor, Human
Services, &
Population Policy
Low-Income Working
Families Project
Metropolitan Housing
& Communities Policy
Nonprofits &
Urban–Brookings Tax

There is no single definition of privatization. Privatization covers a broad range of methods and models, including contracting out for services, voucher programs, and even the sale of public assets to the private sector. But for the purposes of this paper, privatization refers to the provision of publicly-funded services and activities by non-governmental entities.

Privatization is not a new concept. The current rationales for privatization and their implementation strategies differ very little from earlier privatization initiatives (even as early as the 1930s). Perhaps the biggest single change in the current privatization environment in the area of social and human services is the possibility of private companies being contracted with to administer entire public-funded systems (e.g., all of welfare, all of child support, all of workforce development). The real issue is not so much public vs. private--it is monopoly vs. competition. A key issue in the current trend towards what is commonly referred to as "privatization" is the introduction of competition (e.g., public-public competition, public-private competition, competition between public-private ventures, publicnonprofit competition) to increase efficiency, reduce costs, and improve quality and customer satisfaction. Privatization is not inherently good or bad--the performance or effectiveness depends on implementation. The little empirical analysis comparing the effectiveness of public versus private service delivery shows no clear evidence that private service delivery is inherently more effective or...

References: Barr, Stephen and Bill McAllister.. "Downsizing Cuts Federal Union Representation; More Postal Employees Covered."
The Washington Post, June 11, 1997.
Bendick, Marc. 1989. "Privatizing the Delivery of Social Welfare Service." Privatization and the Welfare State, edited
by Sheila B
Bernstein, Nina. "Giant Companies Entering Race to Run State Welfare Programs." The New York Times. Sunday
September 15, 1996, section 1, page 1.
Butler, Stuart M., ed. 1985. The Privatization Option: A Strategy to Shrink the Size of Government. Washington, DC:
The Heritage Foundation
Center on Public Policy Priorities, Austin Texas. Welfare Reform Working Group, April 10, 1997.
Donahue, John D. 1989. The Privatization Decision: Public Ends, Private Means. New York: Basic Books, Inc.
Giuliani, Rudolph W. 1996. Protecting the Children of New York: A Plan for the Administration for Children 's
Government Management Reform Act of 1994 (S. 2170)
Grumwald, Michael
Gurin, Arnold. 1989. "Governmental Responsibility and Privatization: Examples for Four Social Services."
Privatization and the Welfare State, edited by Sheila B
Hatry, Harry P. 1983. A Review of Private Approaches for Delivery of Public Services. Washington, D.C.: Urban
Institute Press.
Hatry, Harry P. and Eugene Durman. 1985. Issues in Competitive Contracting for Social Services. Falls Church, VA:
National Institute of Governmental Purchasing, Inc.
Hughes, Polly Ross, "Ads Seek to Block Welfare Privatization," Houston Chronicle, April 17, 1997, page A1.
Jeter, Jon. "A Winning Combination in Indianapolis." The Washington Post, September 21, 1997.
Kinsey, Marcia. Privatization. Austin, TX: Center for Public Policy Priorities, September 1, 1997.
Magnusson, Paul, "Why Privatizing Welfare Could Actually Work," Business Week, October 21, 1996, p. 94.
"Officials Turn to Retraining, Outsourcing to Handle Caseloads," Employment and Training Reporter, November 27,
1996, pp
Osborne, David and Ted Gaebler. 1992. Reinventing Government: How the Entrepreneurial Spirit is Transforming the
Public Sector
President 's Commission on Privatization. 1988. Privatization: Toward More Effective Government. Washington, DC
Rainey, Hal G
Reason Foundation. 1996. Privatization 1996: Tenth Annual Report on Privatization. Los Angeles CA: Reason
Rein, Martin. 1989. "The Social Structure of Institutions: Neither Public nor Private." Privatization and the Welfare
State, edited by Sheila B
Starr, Paul. 1989. "The Meaning of Privatization."Privatization and the Welfare State, edited by Sheila B. Kamerman
and Alfred J
Texas Comptroller of Public Accounts. 1996. Disturbing the Peace: The Challenge of Change in Texas Government,
Volume 2
U.S. General Accounting Office. 1996. Child Support Enforcement: Early Results on Comparability of Privatized and
Public Offices
U.S. General Accounting Office. 1995. Child Support Enforcement: States and Localities Move to Privatized Services.
U.S. General Accounting Office. 1996. Child Support Enforcement: States ' Experience With Private Agencies '
Collection of Support Payments
"Welfare Experts Lend Clout to Private Companies New to Reform." ETR, October 9, 1996, Pp. 110-112.
Yates, Jessica, "Privatization and Welfare Reform," Welfare Information Network World Wide Web Site,
"" accessed April 22, 1997.
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