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Privatization

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Privatization Trends in Government in the 1990's e University of Submitted to: Prof. Submitted by: D el 6 7 May

PRIVATIZATION HAS BECOME INCREASINGLY ATTRACTIVE TO GOVERNMENTS AT ALL LEVELS BOTH IN THE UNITED STATES AND AROUND THE WORLD. PRIVATIZATION, HOWEVER, POSES A

DIF~ERENT

SET OF PROBLEMS FOR PUBLIC ADMINISTRATORS. THE GOAL OF PUBLIC ADMINISTRATOR IS TO RUN HIS/HER AGENCY AS EFFICIENTLY AS
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,J• .

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POSSIBLE.

BUT IN TIMES OF FISCAL CONSTRAINlj PRIVATIZATION IS SEEN

AS A SOLUTION TO BUDGETARY PROBLEMS. AS WITH ALL ISSUES THERE ARE TWO SIDES. PROPONENTS OF PRIVATIZATION FEEL THAT THE PRIVATE SECTOR CAN DELIVER THE SAME SERVICES THAT GOVERNMENT CURRENTLY PROVIDES FOR LESS MONEY, BETTER QUALITY AND WITH MORE VERSATILITY. ON THE OTHER HAND, OPPONENTS FEEL THAT PRIVATIZATION REDUCES THE QUALITY OF SERVICES, LEADS TO THE DESTRUCTION OF PUBLIC EMPLOYEE UNIONS AND CORRUPTION AND IN THE PROCESS WEAKENS GOVERNMENT

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CONTROL OF THESE SERVICES THAT ARE CONSIDERED ESSENTIAL TO THE PUBLIC. THESE OPPONENTS FEEL THAT IF THE PRIVATE SECTOR COULD HAVE DONE THESE JOBS AT A REASONABLE COST IN THE FIRST PLACE GOVERNMENT WOULD NOT HAVE HAD TO PROVIDE THEM AT ALL. PROPONENTS FEEL IT IS THE FACT THAT GOVERNMENT HAS GOTTEN SO BIG THAT THEY CAN NO LONGER PROVIDE THE SERVICE AT A RATE LOWER THAN THEIR PRIVATE COUNTERPARTS AND THAT HAS GIVEN BIRTH TO A VARIETY OF PRIVATE CONTRACTORS WILLING TO PROVIDE THESE SERVICES AT MORE COMPETITIVE PRICES. GOVERNMENT HAS HAD A

2

MONOPOLY ON THE SERVICE AND NO ONE ELSE HAS BEEN ALLOWED TO PROVIDE THE SERVICE, WHICH HAS LED TO HIGHER COSTS. TO UNDERSTAND THE ISSUE OF PRIVATIZATION IT MUST FIRST BE DEFINED. PRIVATIZATION IS A SHIFT FROM PUBLIC TO PRIVATE
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PRODUCTION. THIS PAPER WILL FOCUS ON PRIVATIZATION OF SERVICES TRADITIONALLY THOUGHT TO BE DELIVERABLE ONLY THOUGH PUBLIC ORGANIZATIONS (EDUCATION,...

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