Privatizing government service delivery: theory, evidence, and implications

The growing dissatisfaction in many countries with the performance of the public sector in delivering goods and services has focused attention on ways to improve the quality of service delivery by the public sector. 'Privatization' is viewed as one way to improve the efficiency and effectiveness of delivering a variety of public goods and services. In this paper the theoretical rationale, empirical evidence, and implications of utilizing the private sector to deliver government services are examined. In addition, the 'tools-of-government-action' idea and the challenges it poses for public management and privatization proponents are looked at. The paper is concluded by the suggestion that a serious rethinking of conventional wisdom surrounding public management be undertaken and by a review of the issues raised by these alternative arrangements in terms of the standards of efficiency, equity, accountability, and authority.