Choosing Public-Service Providers

(This is a current page, from the Patterns of Power Edition 3 book contents.  An archived copy of this page is held at http://www.patternsofpower.org/edition03/6712.htm)

When the State decides to provide funding for services, it also has to choose the organisation which will deliver them – its own employees, civil society or private companies – as examined earlier (3.5.3).  It can be argued that value for money is the single most important criterion in these choices, but there are also political considerations:

  • State provision makes it easier to achieve equality in service delivery.
  • The French government holds a large stake in its partly-privatised utilities, as a concession to its public-service unions – as described by The Economist on 7 July 2005, in an article entitled French privatisation: In name only?. This has resulted in a statist approach, even though consumers in other countries have benefited by allowing competition.
  • As a matter of principle, individualists tend to prefer services to be delivered by private companies operating in a free market; in education, though, this can enable wealthy people to give their children an advantage.
  • State administration of key industries can provide opportunities for corruption, as has been shown in numerous countries – including Corruption, Mismanagement, and Abuse of Power in Hugo Chávez’s Venezuela, for example.
  • Private companies might, by making financial donations, affect the likelihood of being awarded public-service contracts (6.4.5).
  • Localisation enables more choices to be made available (6.6.2).
  • Use of civil society and private companies makes it easier to roll back the frontiers of the State in response to changed circumstances, or in accordance with people’s wishes.

Overall, individualists prefer private provision of public services because that offers more consumer choice and is controlled by market forces rather than the government.  Collectivists are less distrustful of the government and they tend to suspect that private providers are more motivated by profit than by a desire to give a good service.