To Market, to Market: Legislating on Privatization and Subcontracting

Source: Ellen Dannin, Maryland Law Review, Vol. 60 no. 2, 2001

From the abstract:
So enervated is our opinion of public service today, it is a shock to conceive of building this sort of edifice for mere government workers – bean counters and paymasters at that. … We need to ask: when markets are not competitive, can the private sector improve on public sector performance even as it falls short of the competitive ideal? Although it is possible to attempt to create a market by dividing a public service into smaller units, doing so may lead to greater inefficiency, lack of coordination, duplication, and, as a result, greater expense. … Massachusetts is not at the opposite end of Arizona; it does not forbid subcontracting. … Arizona’s privatization legislation mandates that the Office for Excellence in Government develop a model to estimate the total costs for providing a state function and develop a method for comparing those costs to private sector costs. … Arizona, for example, charges its Office of Management and Budget with designing standardized methodology for how the state identifies and evaluates state functions to subcontract and with determining if future competitive contracting with the private sector and other government agencies is in the best interest of the state. … They content that public workers have an unfair advantage because they are familiar with the work and because agencies, as governmental entities, are not required to pay taxes. …