First AnnuAl north CArolinA County PrivAtizAtion surveyJohn loCke FoundAtion
hand, the public sector can be character-ized as a monopoly provider. Govern-ment departments and agencies are oftenthe only service provider, but when it hascompetition from the private sector, thegovernment has unfair access to taxpayerfunds. Often governments increase theirbudgets, not by satisfying customers, butby satisfying special-interest groups wholobby for budget increases. Taxpayers andcitizens alike benet from the consider-ation of privatization techniques becauseincreased competition often lowers costsand improves the quality of services
No. 83 • November 10, 2011
Dr. Michael Sanera
Director of Research and Local Government Studiesat the John Locke Foundation
Research Intern at the John Locke Foundation
Explaining the Different Types of Privatization
Uses a bidding process for service contracts, which allows private-sector serviceproviders to compete with public-sector agencies. If, for example, the countywanted to have open competition for the provision of landll operations, the exist-ing county workers would submit a bid in competition with private companies.The lowest bid, public or private, would receive the contract to provide the service.
A joint venture between a government department and a private rm to providesome service or perform some function. PPPs are commonly used in building gov-ernment ofces, water-treatment plants, and other capital projects.
The public sector contracts with a private or nonprot rm to deliver a service thatpreviously had been provided by government personnel. Taxpayers can benetbecause the contracts are open to competitive bidding. The government maintainscontrol through the terms of the contract. Common examples are food service inschools and county jails, parks management, and wastewater treatment.
A way for governments to increase revenues and cut maintenance costs by shed-ding nonessential property or commercial-type enterprises. In addition, somegovernments have sold buildings, then leased back needed space. The budgetcrisis in California has prompted the state to consider selling the L.A. Coliseum,San Quentin Prison, and a number of state fairgrounds. Asset sales are also calleddivestiture.
For more information
See the following chapters from the John LockeFoundation’s
City and County Issue Guide 2011
Fresh Water and Wastewater Services
Parks and Recreation
Stadiums, Water Parks, Restaurants, etc.