Privatization or Reform? Public Enterprise Management in Transition

Abstract

Introduction: the rise and decline of public enterprise This article addresses the following questions: Why has privatization become so pervasive? Is privatization a good policy? Is there a limit to privatization and has it worked? Are there alternatives to privatization? What is the current status of public enterprises? Can public enterprise management be reformed for high performance and accountability?The article warns about the long-term negative consequences of sweeping privatization, which it sees not as a simple economic policy but rather as a global ideological strategy of capitalism, pursued by concentrated corporate élites and designed to reverse the older strategy of state intervention in the economy pursued through much of the 20th century for reasons of social and economic justice. The article suggests alternatives to sweeping privatization, including serious reforms in the management of public enterprise, which the author believes is not doomed -its resurgence will come for sure, if not very soon.Public enterprises have played a pivotal role in building the infrastructures necessary for national development, in facilitating private sector development and operation, and in enhancing social and economic justice around the world. They have been the engines of economic and social development in both industrialized and developing nations. They were considered essential for national and economic development almost everywhere in capitalist and mixed economies as well as in the socialist nations. Despite their significant contributions, however, they have, since the 1980s, become the target of relentless privatization decisions by conservative/right-wing governments of the West, which have imposed their approach on developing and less-developed nations as well. Unfortunately, some liberal governments of industrialized nations have also pursued privatization in an undiscriminating way.The waves of privatization have sounded a serious alarm among concerned citizens, communities and professionals in public, non-profit and non-governmental organizations. Scholars and experts in government and administration

Public-Private Partnerships and Cooperative Agreements in Municipal Service Delivery

“…The notion of outsourcing the production of public services is the outgrowth of a larger philosophical debate that has had global ramifications (Farazman, 1999). Often referred to as the "Washington Consensus," the "New Political Economy," and "New Economic Model" the government's sole responsibility is to establish efficient institutions for the provision and production of key public services and the enforcement of property rights and contracts.…”

“…(Terry, 2005;Farazman, 1999). The concern is that as local public institutions are restructured around public-private partnerships the ability to return to traditional arrangements will be very difficult even if the partnerships prove to be disadvantageous.…”

“…In the extreme Vickers and Wright (1988) and more recently Farazman (1999) suggest that the Washington Consensus is a radical attempt to raze traditional public institutions. Boin and Hart (2003: 549) assert "old structures must be destroyed before new ones can be implemented."…”

Reforming Public Administration in Southeast Asia: Trends and Impacts

“…Even in communist Vietnam, the state's ideological principle of socioeconomic equality seems to have become less significant than market-led efficiency during the current period of public sector reforms. The main rationale of the current market-driven public policies undertaken by Southeast Asian countries, including privatization, deregulation, and liberalization, is primarily efficiency, although in reality, the outcomes of such policies have often been a worsening condition of economic inequality (Farazmand, 1999;Haque, 1999c). In addition, the main agenda for adopting the aforementioned business management techniques-including Total Quality Management, Work Improvement Team, and Quality Control Circle-is to overcome public-sector inefficiency and achieve the level of efficiency found in the private sector.…”

“…As a result, the validity claims of administrative knowledge are increasingly based on its utility for the marketplace rather than its relevance to the realization of public needs and concerns (Haque, 1999b). In fact, international institutions like the World Bank, the International Monetary Fund, and the International Finance Corporation, have played a significant role in redefining public governance and redesigning the administrative model through various worldwide projects and reports affecting academic institutions in developing countries, including those in Southeast Asia (Farazmand, 1999;Haque, 1999c). In general, these externally prescribed (often imposed) definitions and models of public administration have largely been based on promarket assumptions found in ''new public management''.…”