We look at both sides of the issue.
Steven Frame Defined in the strictest of terms, privatization means the sale of public utilities to private concerns. But as Public Works magazine noted, "in the broader sense of the term …and the definition that applies to most contemporary discussions, privatization is the contract operation of a public utility or service by a private entity.
As Public Works commented, "opportunities abound for private concerns to offer to manage public services with a close eye on cost and efficiency. This trend has grassroots origins, with local governments in the forefront and state and federal levels of government trailing behind.
The purpose of privatization is to take advantage of the perceived cost efficiencies of private firms. Indeed, Water privatization pros and cons of the practice say that privatization results in better performance of needed services at lesser cost.
The firm is normally allowed to choose the methods it will use to perform the requirements of the contract, the trash trucks, used, and the number of workers on each trash truck.
The profit motive will encourage the firm to produce the services efficiently at the least cost, a motive absent in government provision of services.
And governments are expecting public agencies to compete—dollar for dollar—with private operators or surrender management of services. For years, our country has supported the idea that a public workforce was the best provider of essential services. Public employees would reliably and efficiently protect the public safety and deliver water and power; maintain roads and bridges; collect refuse and treat sewage….
In return, public employees enjoyed a certain job stability and a wide range of desirable benefits. Today, several of the nation's largest cities, including New York, Indianapolis, Philadelphia, and Phoenix have contracted out a broad spectrum of services that were previously attended to exclusively by city employees.
Indeed, New York City opened up bidding from private companies on 40 different municipal services in alone. Smaller cities and towns have instituted outsourcing philosophies as well, and many service businesses, both large and small, have garnered significant new contracts as a result.
American City and County reported that various analyses indicate that this trend will likely continue. Many officials also report they would like more information on certain aspects of privatization. It can be deduced that providing additional information on privatization to city officials will lead to increased acceptance.
In the first case, the entire responsibility for a service is transferred from the public sector to the private sector, and individual consumers select and purchase the amount of services they desire from private providers.
For example, solid-waste collection is provided by private firms in some communities. The third form of privatization means that government reduces or eliminates the regulatory restrictions imposed on private firms providing specific services. The second version of privatization refers to joint activity of the public and private sectors in providing services.
In this case, consumers select and pay for the quantity and type of service desired through government, which then contracts with private firms to produce the desired amount and category of service.
Although the government provides for the service, a private firm carries out the actual execution of it. The government determines the service level and pays the amount specified in the contract, but leaves decisions about production decisions to the private firm. Indeed, each element of privatization—from its apparent cost-saving properties to its possible negative impact on minority workers—provokes strong reaction.
About the only thing that everyone can agree on is that the trend has been enormously beneficial to owners of small- and mid-sized businesses. Following are some privatization issues that communities, public providers, and private providers all need to consider: The lower the cost incurred by the firm in satisfying the contract, the greater profit it makes.
On the other hand, the absence of competition and profit incentives in the public sector is not likely to result in cost minimization. Of course, small- and mid-sized companies also need to make sure that they do not sacrifice an acceptable profit margin in their zeal to secure a contract.
Although private firms may pay lower wages and fringe benefits than local governments, the major cause of the cost differences between the private and governmental sectors is employee productivity. Lower labor costs may arise either from lower wages which means that the government was paying wages higher than necessary for a given skill or from less labor input which means that the government retaining more employees than necessary to fulfill need.
Private firms have more flexibility than governmental units to use part-timers to meet peak periods of activity, to fire unsatisfactory workers, and to allocate workers across a variety of tasks. Moreover, critics of municipal governments argue that they are less likely to reward individual initiatives or punish aberrant behavior when compared with their private sector counterparts.
Finally, supporters of privatization argue that the trend has spurred improvements in performance by public service providers. Expected quality of service varies from community to community, depending on a wide range of factors such as historical service levels, local taxation, and possible changes in service requirements.
Moreover, Public Works observed that good service is sometimes defined differently by citizens, public service providers, and private service providers. Proponents of privatization state that private firms may be more likely to experiment with different and creative approaches to service provision, whereas government tends to stick with the current approach since changes often create political difficulties for elected officials.Oct 10, · The pros and cons of Privatization Having explained the meaning of privatization, evidence of how it works, its types and techniques, it is imperative to also look at the pros and cons (merits and demerits) on the economies of Russia, Vietnam and China- .
Nov 17, · Here is the list of latest group discussion topics for Campus recruitment of This list will be updated whenever there are new topics added.
Subscribe to . Yet Cox and Tia McQueen, a fourth grade teacher at the multi-track Salem Elementary School, both prefer the year-round schedule. Why? Teachers and students at year-round schools experience less burnout and they spend less time reviewing material since students don’t encounter the “summer slide,” or a loss of learning.
Is the use of standardized tests improving education in America? Read pros and cons in the debate. In The University of Michigan's Center for Local, State, and Urban Policy published a policy report regarding privatization, the pros and cons, and its impact on local and state government in the United States.
A summary of their conclusions follows. iridis-photo-restoration.com is a nonpartisan, nonprofit organization that presents research, studies, and pro and con statements on questions related to controversial issues, including illegal immigration in the United States.