6.7.1.2 Choosing Public Service Providers
When choosing public service providers, politicians must satisfy their supporters and accommodate pressures from suppliers who may be donors
When the State decides to provide funding for services, it must also choose the organisation which will deliver them – its own employees, civil society or private companies – as examined earlier (3.5.3). It must also decide what is the appropriate level of subsidiarity: localisation enables services to be more responsive (6.6.2).
It can be argued that value for money is the single most important criterion in these choices, but there are also political considerations:
Benefits of government provision
Collectivists prefer government provision of public services because that makes it easier to achieve equality.
● Public provision of education reduces the inequalities in society, because private education enables wealthy people to give their children an advantage.
● There is a suspicion that private providers are more motivated by profit than by a desire to give a good service.
● Individualist ideology is prompting Britain’s Conservative Party to quietly privatise the country’s National Health Service (NHS), as described in blog posts on this website. A study suggests that this NHS privatisation drive “has corresponded with a decline in quality and “significantly increased” rates of death from treatable causes”, which echoes the evidence from America that privatised healthcare is not cost-effective (3.5.3.6).
Benefits of choosing private providers
Overall, individualists prefer private companies when choosing public service providers, because that offers more consumer choice and is controlled by market forces rather than the government (3.5.3.3). People may need information and help when they are choosing public service providers, however. Individualists argue that State involvement is problematic:
● State administration of key industries can provide opportunities for corruption, as has been shown in numerous countries – including Corruption, Mismanagement, and Abuse of Power in Hugo Chávez’s Venezuela, for example.
● The French government holds a large stake in its partly-privatised utilities, as a concession to its public-service unions. This has resulted in lack of consumer choice, as described by The Economist on 7 July 2005 in an article entitled French privatisation: In name only? Consumers in other countries have benefited from being able to choose between private providers.
● Use of civil society and private companies makes it easier to roll back the frontiers of the State in response to changed circumstances, or in accordance with people’s wishes.
Public benefit
Ideally, privatisation decisions should be driven by a desire to provide the best service to the public, taking account of economic evidence, rather than by political ideology.
This page is intended to form part of Edition 4 of the Patterns of Power series of books. An archived copy of it is held at https://www.patternsofpower.org/edition04/6712b.htm