Privatization of governmental services is becoming more popular at the national and state level, as government officials call for shrinking the size of government. A recent article on the moneycrashers.com website gives some history of privatization and shows that it has a downside.
The Downside to Privatization
The greatest downside, according to the article, is that politicians may use privatization as a means of giving themselves, or their friends, business contracts or a means of making easy money. They cite the example of Tammany Hall in the 1800s, where government officials gave out $200 million in public works money to private companies.
Reasons for Privatization
There are a few reasons that propel those in government to try to privatize services. Our Palm Springs government law firm helps keep an eye out for situations where privatization will work and where it will not. Palm Springs government legal counsel can assist local governments in these decisions.
Ideology, economics, history, effectiveness and efficiency were cited in the article as the main reasons for privatization. Sometimes it is a good thing, but there is always the danger of corruption. It is harder for the public to trace money when it is in private hands, than it is to keep track of how government spends money.
There are some who ideologically just believe smaller government is better. But even with that, greed is always close by. A government official may believe smaller government is better, or they may be just transferring work to a private business for their own personal gain, or to ensure campaign contributions and votes.