The debate over “Is Privatization a Bad Deal for Cities and States?” highlights the factors that greatly influence the decision of keeping a public service in-house or contracting it out.
The first point to be considered is competition. The more competitive is the private market on the expected outsourced service, the higher are chances of reduced prices and better quality of service provision to taxpayers.
The second issue is measurement. Monitoring and enforcement may turn outsourced public services into more expensive than in-house ones; thus, it is essential to carry out a diligent financial analysis on the costs of keeping track of the advancements of partners.
The third aspect is complexity. Public services that are difficult to quantify and are highly sensitive to democratic values should be kept in-house. Public administrators struggle to guarantee predictability of contracts and check & balance systems when bottom-lines are barely quantifiable or ever-changing.
Competition, measurement, and complexity, therefore, are the three main factors discussed in this the New York Times forum. All of them are directly tied to the final costs of in-house and outsourced public services.
http://www.nytimes.com/roomfordebate/2011/04/03/is-privatization-a-bad-deal-for-cities-and-states?hp
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