Does privatization promote efficiency? It depends.

• Author: Harris, James
• Position: The Bookshelf

In Cities and Privatization, Jeffrey Greene provides a comprehensive orientation and summary of the issues and challenges relating to the ongoing debate on the privatization of government services. Compared to other attempts to tackle such a well-argued topic, the book is relatively short, perhaps even concise, which speaks more to the author's ability to encapsulate complex issues than to any omission of pertinent information. The book is not without its flaws, and those who are eagerly awaiting new compelling information in support or against privatization will have to wait a bit longer. Despite its shortcomings, the book is an excellent read for graduate students and other initiates into the public policy realm.

Chapter 1 begins by defining privatization or "outsourcing" and explaining how, despite contemporary criticism against it, the practice of contracting public services to the private sector is as common as it is old. The author then clarifies the perspectives on both sides of the argument by identifying the basic points and the economic theories that support them.

Chapter 2 presents the concepts of efficiency and effectiveness, and explains how these two metrics are developed and used in measuring the financial value of privatization. The author then shows how these metrics are practically used as a form of performance evaluation in the provision of public services such as fire protection, trash collection, and water utility service. The chapter concludes with a summary of the reasons why governments choose to contract services to the private sector.

The third chapter is arguably where the author makes the most thoughtful contribution to the privatization discussion, exploring the factors that help to explain why some governments privatize more than others. In this discussion, he makes particular reference to trigger mechanisms"-fiscal and political factors that contribute to the likelihood of a government's choice to privatize public services.

The fourth chapter is dedicated to summarizing the successes and failures of privatization in various sectors of public service provision, examining actual cases in service provision sectors such as garbage collection, parks and recreation, facility and fleet management, and others. Within this context, the author introduces the concepts of "competitive bidding" and "managed competition," along with their impacts on the service provision process. Finally, he identifies cases in which...