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LA must find will to follow through with privatization

Louisiana’s temporary Commission on Streamlining Government has fomented some good ideas about privatization of state government functions. The next step is to make sure that political considerations do not sabotage the savings that could result.

In its most recent meeting, state departments offered to it assessments about areas in which privatization may save money. At least several million dollars a year were identified, and a more vigorous effort might reveal much more. Encouraging also was the stated realization that the reform did not apply universally as a panacea to bloated state expenditures, that some areas simply could or would not produce savings by its application.

But the state must avoid the political problem of using privatization as a substitute for creating priorities and funding on the basis of necessity of function. Institution of privatization cannot occur then followed by a declaration that the process of saving had run its course. This only makes government operation more efficient; it doesn’t eliminate expenditures tied to activities that government really has no need to be performing in the first place. The latter must be dealt with in addition to the former.

Also critical, the state must not let anti-privatization bias short-circuit this effort. Often within government there arises a prejudice against privatization because it is assumed that only government can perform a certain task because it may have been the first entity to do so and/or it has been doing it for a long time. Government well may be the first to do something because, at the time, the activity cost more than it would produce in benefits and/or it required large start-up costs the private sector was unwilling to absorb.

However, times change and as the economy has a whole continues to differentiate and technology advances, what functions in the past seemed like money-losers and/or too costly to get off the ground today attract competition within the private sector. Thus, the Commission must review every function of government and simply not assume that just because government does it and/or has been doing it for a long time, it doesn’t mean it can’t be done more efficiently by the private sector.

Another political challenge comes from an approach which often is a red herring, assertion that the mission-critical nature of an activity means that only government can do it to ensure that it gets done in a quality way. Certainly, there are some functions in government where this is true, such as in the more intense activities of public safety. However, most of what government does simply is not so critical that the search for profits by a private contractor would interfere in making sure the job got done right, but instead would add efficiency to make the function be performed better. For example, does anybody seriously think that if the contract-letting and monitoring functions of Shreveport’s Department of Community Development had themselves been contracted out that a private concern, knowing slackness would expose it to losing the contract and criminal charges, would have been so lax as to allow the corruption rife in that agency to have existed?

Finally, politicians who believe government is there primarily to redistribute wealth and parasitical organizations that agree with this, such as labor unions, will resist it. It means lesser amounts of money can be taken from the people for redistribution from the perspective of the politicians, and from the union view less money transferred to workers because the rate of unionization is much higher in government than in the private sector. For the latter, privatization eliminates unionized jobs and replaces them with fewer non-unionized positions, weakening unions power. Overcoming the resistance of these parochial interests that have no desire to save money for all at their particular expenses might prove problematic.

Nevertheless, it is quite refreshing to see privatization taken more seriously than it ever has been by state leaders. Yet that’s the easy part; the difficult part will be to overcome special interest objections and whether the political will exists too see it all through will be the ultimate test of the seriousness of state government on this issue

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