Privatization: Metropolitan Boston Transit Authority (MBTA) and the California State Compensation Insurance Fund

Privatization: Metropolitan Boston Transit Authority (MBTA) and the California State Compensation Insurance Fund

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Privatization: Metropolitan Boston Transit Authority (MBTA) and the California State Compensation Insurance Fund



According to Robert B. Denhardt, Public Administration an Action Orientation, privatization "is the use of non governmental agencies to provide goods or services previously provided by government." (P.95). Privatization comes in various degrees, from the outright selling or transfer of government ownership of assets (for example public utilities), to, as is more common in the United States - the contracting of goods or services to private firms.

Contracting is not something new in government. For example the Defense Department procures new weapons systems from the private sector all the time and the Pentagon oversees contracts totaling more than $150 billion a year. From the outset, it must be made clear that privatization is an enormously complex issue for which there is no simple solution. However, it is an idea that has grown tremendously popular among politicians (and by natural extension Administrators who must carry out policy issues once policy decisions are made by the politicians) in recent years.

The idea of privatization will likely not diminish as cash starved governments from the federal to the local levels seek to reduce costs while promoting efficiency. It is this idea of reducing costs that will be the focus of this paper. We will see as the debate unfolds that when it comes to government, costs alone is not always the determining factor in the delivery of goods and services. There are many arguments that cost reduction does not necessarily improve efficiency nor does it guarantee equal delivery in the delivery of goods and services (equality being a fundamental constitutional value). Fin...


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...bility of Public-Private Competition As A Long - Term Service Delivery Strategy." Public Productivity & Management Review 19, Number 1 (September 1995): 12-24.

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Cohen, Steven, Eimicke, William The New Effective Public Manager - Achieving Success in a Changing Government. 2nd ed. Jossey-Bass San Francisco 1995.

Wallin, Bruce A., "The Need for a Privatization Process: Lessons from Development and Implementation. Public Administration Review 57 Number 1 (January/February 1997): 11-20. http://fpac.fsu.edu/parbaby/pdf/1997/janfeb/wallin.pdf

Dilger, Robert J., Moffett, Randolph R., Struyk, Linda, "Privatization of Municipal Services in America's Largest Cities" Public Administration Review 57 Number 1 (January/February 1997): 21-26. http://fpac.fsu.edu/parbaby/pdf/1997/janfeb/dilger.pdf

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