Academics Say the Darnedest Things…

It’s too bad that articles in academic journals are so filled with jargon, because they often contain valuable information, or make important points that get ignored or glossed over, even by other members of the academy.

Case in point, a recent article in Public Administration Review, a very highly-regarded journal focusing on issues of public management. The title ” Governance, Privatization and Systemic Risk in the Disarticulated State” was calculated to make your eyes glaze over, and I will admit I only read it because I know both of the co-authors (one is a SPEA colleague) and know them to be first-rate scholars.

Ignore the wonky title. This is yet another analysis of government’s love-affair with privatization.

The authors apply research on “systemic risk” to the public-private partnerships that have become ever more common over the past quarter-century or so, the networks of for-profit and non-profit organizations increasingly used by public-sector agencies to do government’s work and deliver public services. As they note, such public networks are similar to financial systems: they are complex, interdependent and risky. Furthermore, if and when they fail, that failure has “potentially catastrophic” effects on citizens who depend upon public services.

One of those risks is that an organization in one of these privatized networks will try to benefit at the expense of the others. The article cites several examples: halfway houses in New Jersey were found to have falsified records in order to have high-risk inmates placed in their (understaffed) facilities; in Tucson, Arizona, a downtown development project employed a network of developers and consultants that spent millions of taxpayer dollars and failed to produce anything.

The risk isn’t confined to dishonesty and self-dealing. The Providence Service Corporation is the largest provider of privatized social services in North America. When the 2008 Great Recession hit, investors dumped their stock in the company (it went from $36 per share to less than a dollar). The loss of capital threatened the ability of the company to continue delivering services to 70,000 clients.

After an extensive discussion of the nature and extent of the dangers involved, the authors conclude that, “reliance upon third parties to produce government services is fraught with risk at all levels.”

This analysis joins a growing and steady accumulation of evidence that the wholesale embrace of privatization of public services is too often costly, risky and counter-productive.

The rush to privatize–to offload public responsibilities–is part and parcel of the assault on the whole enterprise of government that has always been part of American political discourse, but which really gained traction during the Reagan Administration. It’s an attitude, rather than a philosophy, and it plays to the very American desire to address messy, complicated realities with simple, bumper-sticker remedies.

As we are learning the hard way, government can’t privatize away its responsibilities, and too often, the effort to do just that ends up making matters worse.


  1. You make a good argument Sheila for those who feel that government is the end all answer to all that ails this Even if it is not sick you imply the government should run it anyway. Not Me. I for one do not want to live in a socialist society that takes away my independence to either succeeed onm my own or even fail on my own. You want a government that determines all facets of our lives both publicly and privately. Whatever happened to a small government as envisioned by the Founders. A government structured to help facilitate our lives not be a source or regulator of all things. There is absolutely nothing, probably with just a few exceptions and they were envisioned by the Founders, that government can provide for the citizens that cannot be done through private enterprise either more cheaply or with more efficiency than a beurocracy. We cannot afford the government we have now, how can your preach for even more? Sorry…but you are way off base. By the way, have you ever figured your your own personal share of the National Debt really is? And, My God it’s growing every second. What if they called you tomorrow and said pay up? Would you still have the same opinion?

  2. Marvin,
    Why do people who are selfish always try to invoke the founding fathers as their mentors. Your fear of socialism is modern McCarthyism. You would opt for no public education, no street lights, stop lights, roads, snow removal or any government services because the founding fathers say it is socialism. Sorry your fear of bogeymen should not infringe on services that cause economic growth for all and basic services that are required for any society to function. If your fear of government is so severe please set up a tent in the woods and become self sufficient and stop ruining our country with your false narratives and paranoia.

  3. Marvin, your entire argument is a strawman. Professor Kennedy never said anything about expanding government; she was citing one of the many voluminous studies that have found that private industry shouldn’t be doing what the government exists to do. And speaking of the “Founding Fathers”: they had no idea what socialism was. It didn’t even become a term until the third decade of the 19th century, and that was in France. It’s unlikely anyone of importance in the United States even heard the term until 1850 or later. Stop constructing your entire thought process about government around a group of people who would faint from shock if they saw an iPad.

  4. I want to congratulate Mr. Blitz on his post, because it serves as a model of the sort of attitude that exists which is passionate and confident, that serves as a remarkable contrast to the main article, but in the end is evidence-free and wrong. This is not clear thinking. It’s emotion driven by cognitive distortions at a time when this country needs evidence and clear heads. The main article, on the other hand, focuses on data-supported points. It does not contend that “government is the end all answer”, but it does show that giving over everything wholesale to private enterprise is a risky and a poor option. Mr. Blitz and people who have his attitude need to give serious thought to what they are advocating. If they think that “socialism” is dangerous, consider that ideological route for a bit, and include some data.

  5. Proud Democratic Socialists checking in.
    I want to ask Mr. Blitz to PLEASE CHANGE THE FREAKING CHANNEL. You sound like a Fox bot on repeat. Really, what is wrong with you people? I cannot for the life of me understand how these people survive in reality. His thoughts are why I had to get out of Indiana so that I could get away from that way of thinking. Unfortunately, those people have infiltrated every state in this country by way of Fox Spews.

  6. I think it is pretty funny that pro-market people forget that privatizing something also EXPANDS the government, sometimes even more so than if services were kept in-house. Additionally, this often creates problems of authority and monitoring that can be avoided otherwise (cough cough, Snowden).

  7. I have made this point repeatedly. Contracting out not only doesn’t “shrink” government, it expands it while reducing its visibility and thus its transparency. Proponents evidently believe that the size of government is measured by the number of employees on its payroll–not those whose salaries are entirely paid by taxpayers via government contract. (In point of fact, we should be more worried about government INTRUSIVENESS than government’s size. The important question should be: Is the state doing something that government really shouldn’t do?) The last time I looked, during the last Bush Administration, there were eighteen million contract employees doing full-time jobs for government–people who weren’t counted as government employees despite the fact that taxpayers funded their entire paychecks.

  8. Like you, I worry about the government’s intrusiveness into our private lives more than the size of the government as measured by employee numbers. On the other hand, I’m looking at privatization or sub-contracting of ‘some’ jobs, whether in the private or the public sector, as positives that can free up both private business and the public sector to concentrate and focus on their purposes, their mission. These particular jobs trend toward the unskilled level, such as janitorial, housekeeping, custodial. Sub-contracting such jobs, on surface, might appear to cost the same dollar amount; however, the savings are realized when factoring in the reduction of time spent by skilled, highly paid employees having to deal with personal issues including absences, late arrivals, early departures, poor job performance, etc. These are the job issues that drag down any public sector organization and, for the sake of efficiency, are best handled by privatization.

Comments are closed.