Pragmatic Privatization Works Best

As first appearing in the Columbia Daily Tribune on Feb 16, 2014:

When I was growing up, I regularly played golf at the Forest Park municipal golf course in Saint Louis. Later, in my high school and college years, I noticed that the quality of the course was improving — a lot. This happened at the same time (late 1980s) that the city of Saint Louis outsourced the management of the golf course to a private company. As that outsourcing, or privatization, of the golf course has continued, the quality of the course has continued to improve. I doubt you would find one golfer familiar with the course before and after who thinks the outsourcing of its management and operations did not significantly enhance it.

That same type of story is repeated throughout Missouri. Good government need not be big government, and the public sector does not have to provide public services in every case. There is a role for private delivery, often regulated, of public services in Missouri. In many cases, the private sector can deliver those services more affordably and at a higher quality than the government.

Benton County, near the Lake of the Ozarks, had been spending a great deal of money reimbursing employees in its health department for use of their personal automobiles. Buying a number of government-owned cars to give to employees made even less fiscal sense. So in 2009, the Benton County Health Department contracted with Enterprise to manage its fleet of department cars. In the first year, Benton County saved $38,655. The program has continued with similar success. Enterprise’s expertise in maintaining a fleet of cars for Benton County’s use is a prime example of how the private sector can save taxpayer dollars and improve public service at the same time.

Research has shown that privatization works best when the driving force is pragmatism, not ideology. Politicians and voters can still debate about what services should be provided as part of the eternal debate over the role of government in our society. But privatization is more about how those services are provided, not whether they should be. Unless you genuinely believe that as many people as possible should be on the public payroll, like the big-city political machines of yesteryear, then a government service that you depend upon or care about likely can be addressed with privatization.

There are certain roles that should always belong to the government, such as police powers, and never to the private sector. Furthermore, the role of government regulation in many privatized public services is important, such as regulation of private utilities. Finally, in some instances, such as animal control, private partnerships with not-for-profit groups might be preferred to for-profit companies. Whatever way you look at it, there are numerous examples, such as the many private hotels, bike shops, restaurants and more that serve riders along the Katy Trail, where the private sector can provide better services, greater flexibility and lower costs for Missourians. Just play golf at Forest Park to see the evidence.

David Stokes is the director of local government policy at the Show-Me Institute, which promotes market solutions for Missouri public policy.