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The Pros And Cons Of The Pre-Privatization Of Government

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In his 1849 essay Civil Disobedience, the famed author Henry David Thoreau stated, “That government is best which governs least”. While the work has grown old with the passage of time, it remains applicable to a significant issue that politicians face in each administration: to privatize or not to privatize public programs.

Truly, it would behoove both government and private citizens to be in favor of selling contracts to private businesses to run specific services. Undoubtedly, this would shift these programs into a zone that the government cannot as easily control as if it was under its own umbrella, but the pros certainly outweigh the cons.

One, privatization of government function would make these public services more efficient by trimming …show more content…

In advance of their 1984 government sale, they had a call failure rate of 1 in 25. Since then, that figure has fallen drastically to 1 in 200; what’s more, the wait list for telephone installation that had existed in their pre-privatization era has been eliminated.

As an added benefit of the increased efficiency and decreased costs in these different services as a result of their privatization, the savings are often passed on to the American taxpayer. According to the Mackinac Center for Public Policy, over 100 studies have confirmed this very statement. What’s more, in each of these studies, the reduction in cost averaged up to 40%. With the additional money in their pockets, these citizens will be able to inject it into the economy, aiding growth and consequently encouraging an influx of new businesses.

Finally, the potential for government revenue. Through the sales of these contracts, governments gain an additional source of money that can be put towards a number of different tasks within the bureaucracy. They could inject it into various state-run programs, use it to pay off in part the national debt, or return it to the American citizens in the form of a subsidy or tax reduction, or a variety of other things. Privatization has increased government revenue on a number of occasions, but I would like to draw your attention to two examples in particular - GTECH and Washington State’s Initiative

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