Today’s complex problems have increased the importance of effective delivery of public services from government. This growing need has prompted governments to seek help from private entities in the provision of many services, a process called privatization. Unfortunately, the interconnections, or nexuses, between public and private entities sometimes produce undesirable outcomes for the public.
In 1999, as part of the International Monetary Fund’s (IMF) Highly Indebted Poor Countries Initiative (HIPC), the IMF required the Nicaraguan government to privatize their national electric power company. The main reason for the IMF’s request was the power company’s negative impact on the national budget. Fifteen years later, the quality of the electrical service has improved significantly. Power outages that were once the norm are few and far between. However, these improvements have not come without costs, literally. The cost of electricity has more than quadrupled.
For this Discussion, consider Nicaragua’s experience. Think about how privatization can be a positive policy tool and its implications for social justice.
Post your perspective on whether privatization is a positive public policy tool. Why or why not? Then, explain at least two implications of privatization from a social justice perspective.
Please support postings with specific references to the Readings.
- Hudson, W. E. (2017). American democracy in peril: Eight challenges to America’s future (8th ed.). Thousand Oaks, CA: Sage.
- Chapter 6, “The Sixth Challenge: The ‘Privileged Position’ of Business” (pp. 219-256)
- Chapter 8, “The Eighth Challenge: The National Security State” (pp. 301-348)
- Shafritz, J. M., Lane, K. S., & Borick, C. P. (Eds.). (2005). Classics of public policy. New York, NY: Pearson Education.
- Chapter 5, “The Political Economy of Public Policy”
- Capitalism and Freedom (1962) (pp. 185–189)
- American Federation of State, County and Municipal Employees. (2006). Don’t be a prisoner to empty promises: Prison privatization: The five empty promises. Retrieved from http://www.afscme.org/news-publications/publications/privatization/pdf/Prison-1.pdf
- Clemmitt, M. (2012, July 13). Privatizing the military. CQ Researcher, 22(25), 597–620.
- Hacker, J. S., & Pierson, P. (2010). Winner-take-all politics: Public policy, political organization, and the precipitous rise of top incomes in the United States. Politics & Society, 38(2), 152–204.
- Kosar, K. R. (2006). Privatization and the federal government: An introduction. CRS Report for Congress (Order Code RL33777). Retrieved from http://www.fas.org/sgp/crs/misc/RL33777.pdf
- Milward, H. B., Provan, K. B. (2000). Governing the hollow state. Journal of Public Administration Research and Theory, 10(2), 359–379.
- National Center for the Study of Privatization in Education (NCSPE). (n.d.) Information resources. Retrieved from http://ncspe.tc.columbia.edu/information-resources/