Privatization in State Government: Trends and Issues
Author(s)
Chi, Keon S.; Arnold, Kelley A.; Perkins, Heather M.
Abstract
The topic of privatization – outsourcing or contracting – seems to have re-emerged recently as a controversial management issue for state policymakers. This article reports findings of a recent national survey conducted by The Council of State Governments of selected agency directors in the 50 state governments, offers lessons learned from the previous experiences and raises key issues for future privatization activities. Contracting has been the most widely used method used by state governments to privatize, followed, to a much less extent, by public-private partnerships. Most budget and legislative service agency directors reported on savings from privatization to be 5% or less. But many of them could not answer whether privatization saved their state agency money or not, while 18% said it has resulted in no savings. There are a number of key issues for state policymakers to consider when contemplating privatization either on a statewide or agency-wide basis.
