Privatization In State Agencies

Abstract

This article examines the question of why state governments choose to privatize goods and services. After reviewing the literature, to explore the question, the authors devised their own model of state privatization. Although the existing literature describes in great detail the benefits and disadvantages of privatization at all levels of government, it does not address why governments privatize. Using the Clean Water State Revolving Fund (CWSRF) program, the authors test their model of privatization use by state government using political, economic, and administrative variables. They find support for political and cultural influences and state economic conditions as explanations for why privatization is chosen as an option by state governments.