262 PART ThRee • InsTITuTIons oF AmeRIcAn GoveRnmenT
Privatization
The replacement of
government services
with services provided by
private firms.The idea of sunset legis-
lation was initially suggested
by Franklin D. Roosevelt when
he created the host of New
Deal agencies in the 1930s.
His adviser (and later Supreme
Court justice), William O.
Douglas, recommended that
each agency’s charter should
include a provision allow-
ing for its termination in ten
years. Only an act of Congress
could revitalize the agency.
The proposal was never
adopted. It was not until
1976 that a state legislature—
Colorado’s—adopted sunset
legislation for state regulatory
commissions, giving them a
life of six years before their
“suns set.” Today, most states
have some type of sunset law.Privatization, or contracting out
Another approach to bureaucratic reform is privatization, which occurs when gov ernment
services are replaced by services from the private sector. For example, the government has
contracted with private firms to operate prisons. Supporters of privatization argue that
some services can be provided more efficiently by the private sector. A similar scheme
involves furnishing vouchers to government “clients” in lieu of services. Instead of supply-
ing housing, the government could offer vouchers that recipients could use to “pay” for
housing in privately owned buildings.
The privatization, or contracting-out, strategy has been most successful on the local
level. Some municipalities have contracted with private companies for such services as
trash collection. This approach is not a cure-all, however, because many functions, particu-
larly on the national level, cannot be contracted out in any meaningful way. For example,
the federal government could not contract out many of the Defense Department’s func-
tions to private firms.
The increase in the amount of government work being contracted out to the private
sector has led to significant controversy in recent years. Some have criticized the lack of
competitive bidding for many contracts that the government has awarded. Another con-
cern is the perceived lack of federal government oversight over the work done by private
contractors.Incentives for efficiency and Productivity
An increasing number of state governments are beginning to experiment with schemes
to run their operations more efficiently and capably. These plans focus on maximizing the
efficiency and productivity of government workers by providing incentives for improved
performance. Some of the more promising measures have included permitting agencies“Who do I see to get big government off my back?”© 2006 Mick Stevens The New Yorker Collection from cartoonbank.com. All rights reserved.
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