reform and privatization

REFORM IN AMERICA

In order to talk about reform in america, we have to go back to the beginning, where our country started it's commitment to change through the revolution and the constitutional process; the political imperative to reform has stuck with us for decades. The most clever administrative ideas come from the private sector; there's a general belief in this country that we prefer private solutions for public problems whenever possible; many administrative thinking comes from the private sector. Reforms, additionally, come from experiments occuring at state and local levels of government. We can use a reform, for example, happening in California and implements that across States or in the federal government.

PERFORMING THE EXECUTIVE BRANCH — A SHORT HISTORY

The following are reforms that impacted America in a huge way:

  1. Possibly the most prominent one is the Brownlow Committee (1936): this reform happened in the meat of the Great depression and there was a belief that the executive branch just didn't have the resources to deal with this. Therefore, via the Brownlow committee, the executive Office of the President was created which included more agencies, staff and advice for the president.

  2. The Hoover commissions (1947 & 1953) occurred after world war II.

    1. So, right after the Great depression comes world war II. Bringing together all resources this reform needed to prosecute this war was large project or major undertaking but also was an opportunity to expand the government on a grand scale. It was not robustly successful but it did highlight that possibly the government had gotten too big.

    2. The second Hoover commission made us question whether the government services that was being provided should be in the public or private sector; is it inherently governmental or commercial value? However, a lot did not come out of this.

  3. The Ash council (1971) occurred during the Nixon administration to combine or consolidate the government into basically five super agencies. Sadly, Watergate happened and President Nixon decided to implement this into his second term. In conclusion, the ash council went nowhere.

  4. The President's Private Sector Survey on Cost Control or the Grace commission (1982) was built on the second Hoover commission. More prominently, this was built on the so-called Reagan revolution because this is one of the first thing President Reagan does when he became president. President Reagan placed Peter Grace on this commission to find ways to get the government out of certain services. This involved an extensive report and a lot of recommendations but not a lot of vital changes occurred in the government from this. On the other hand, it signaled a different way of viewing business that we still debate about to this day.

  5. The national performance review or Reinventing Government (1993) was a program about improving governance to make it more efficient. Vice president Gore and President Clinton werent interested in slashing and burning the government like the grace commission and the second Hoover commission was. It wanted to unshackle public employees by helping them make better decisions. They believed that, at the time, there were too many personnel regulations and wanted to focus more on contracting opportunities or looking for ways to take advantage of the private sectors (not leaving everything in the private sector's hands). In terms of how governance, the national performance review becomes a big deal for the next two decades (the relationship between the private sector and the government). As a result, this led to the reduction of the federal government by approximately 200,000 federal employees which is remarkable in a way. The contrary belief to this is that many of them just shifted over from federal employees to quasi government employees; some believe that they just no longer obtained the title of working for a government agency.

  6. As I mentioned before there always has been this tension between Congress and the executive branch. Most of these reforms were basically trying to make the federal government managerial by implementing and importing these techniques from the private sector. In response to this, Congress legally pushed against this in an attempt to maintain their ability to control the executive branch and made sure the executive branch is adhering to due process rules. As a result, the administrative procedures Act (APA) was passed in 1946. This reform’s mission is to give guidance to how we get to a policy goal and how involved should the public be in the decision making.

PRIVATIZATION

Three different types of privatizations:

  1. Selling government assets

  2. Financing public facilities

  3. Private provision of services

Selling government assets is privatization in its purest form where the government sells off assets to private sectors. Because, in this country, we don't have many assets to sell, this doesnt happen often. You can use Great Britain selling assets like a Jaguar automobile, British Rail or British Airways in the mid 20th century as an example. Financing public facilities involve finding ways to pay for certain things the government can't do directly by using unique financing operations from the public sector to help the government put together innovation in the financing of expensive projects. Private provision services are also known as contracting out or outsourcing. This occurs more often than the others. This is where the government holds responsibility for the service using tax dollars but hiring a company with the expertise to do it.

“THE COMPETITION PRESCRIPTION”

The mechanism that is under all the privatization issues or programs it's called competition prescription. There is a belief that we must include competition to public sector monopolies. Without this comes a lot of bloat and inefficiencies. Therefore, Steven Goldsmith introduced a test called The yellow pages test that argues that every government should look at the services they provide, look at the yellow pages, look at the providers that offer some similarities of a marketplace out there and compete with that service.

On the other hand, while of course some services that involve competition has changed the nature of the service being given while saving money in the process, a lot of times these markets don't emerge around services due to services having thin markets like the defense industry and social, health and human services. There's only a small amount of organizations that are able to provide those types of services. So, in reality, trading public sector Monopoly for private sector Monopoly might not get us the efficiency gains like transparency, responsiveness and general accountability we desire.

RATIONALES FOR CONTRACTING OUT

  1. Cost savings - with competition, costs are going to go down.

  2. Flexibility - this helps to get around a few of those civil service rules and regulations because we don't always have to reform the agency or reduce the size of the agency when hiring contractors.

  3. Political support - self explanatory

THE DOWNSIDE OF PRIVATIZATION

  1. Accountability changes (e.g., military contracting): think of the Iraq war for example where a smaller military presence was desired but a larger contractor group for the surge capacity to give the military the ability to do what they do best. As a result, however, we aren't fighting the war with fronts. The friends are not established like world war I. Therefore contractors were everywhere and were whooping ass whether they liked to or not in many cases.

  2. Inherently governmental services?: Self explanatory

  3. Faith-based initiatives: self explanatory