Privatizing Government Services

December 8, 2017 • Volume 27, Issue 43
Do business-run public services save taxpayers money?
By Reed Karaim


Demonstrators in Boston on March 13, 2017 (Getty Images/The Boston Globe/David L. Ryan)
Demonstrators in Boston on March 13, 2017, protest plans to let private firms handle driver and maintenance jobs for the city's public transit system. Supporters say privatization saves money and spurs innovation, while opponents say it does not always save money and that private businesses should not control vital public services. (Getty Images/The Boston Globe/David L. Ryan)

President Trump has said he wants to turn over certain public functions, including air traffic control, to profit-making private contractors. While his specific intentions remain unclear, supporters of privatization contend it would save money and inject competition into what they claim is a bureaucratic system that lacks efficiency and innovation, discourages cost cutting and falls prey to political whim. Opponents argue, however, that privatization often fails to reduce costs and undermines democracy by putting private business in charge of vital public services. Republican President Ronald Reagan advocated privatization in the 1980s, and it has grown under both Republican and Democratic administrations to include charter schools, municipal water systems and military operations. Still, some of the fervor for privatization has cooled in recent years, especially after studies found higher rates of civil rights abuses, medical neglect and assaults on guards in privately run prisons than in government facilities.

ISSUE TRACKER for Related Reports
Dec. 08, 2017  Privatizing Government Services
Aug. 09, 1996  Privatizing Government Services
Nov. 13, 1992  Privatization
Oct. 07, 1988  Privatization: Third World Moves Slowly
Jul. 26, 1985  Privatizing Public Services
Air Safety and Security
Air Transportation
Consumer Behavior
Consumer Protection and Product Liability
Cost of Education and School Funding
Education Policy
Federal Courts
Motor Traffic and Roads
Outsourcing and Immigration
Party Politics
Party Politics
Powers and History of the Presidency
Privatization of Government Functions
Public Transportation
Regulation and Deregulation
Sentencing and Corrections
Supreme Court History and Decisions
Travel and Tourism