6.7.1.2 Choosing Public-Service Providers

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.

●  As a matter of principle, individualists prefer the freedom of choice offered by private companies operating in a free market (3.5.3.3).  People may need information and help in choosing.

●  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.

●  Private education can enable wealthy people to give their children an advantage.

●  Individualist ideology is prompting Britain’s Conservative Party to quietly privatise the country’s National Health Service (NHS).  A study suggests that this NHS privatisation drive “has corresponded with a decline in quality and “significantly increased” rates of death from treatable causes”, which echoes the evidence from America that privatised healthcare is not cost-effective (3.5.3.6).

●  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 of services provided by the government 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.  It would be better if privatisation decisions were driven by a desire to provide the best service to the public, taking account of economic evidence, rather than by political ideology.

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This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition04/6712.htm