Many governments around the world have chosen instruments other than the state bureaucracy to deliver public policy.
In my country, the United States, you can find whole service systems in areas like mental health policy entirely privatized where an array of private companies and nonprofit organizations both govern and deliver taxpayer funded services to a vulnerable population like the mentally ill with almost no state involvement other than to let the overall contract to run the system.
Instruments of public policy like contracts, partnerships, and alliances are viewed by governments as ways of outflanking slow footed bureaucracies that are unable or unwilling to adopt the modern business methods. Governments also turn to these instruments in the hope that private companies and nonprofit organizations can deliver government services better, faster and cheaper to its citizens.
In my view involving the private and nonprofit sectors in helping governments deliver better public services is a good thing. However, good things carried too far can have bad effects. I worry that privatization of public services can, if not carefully designed, outrun the ability of governments to control them.
In countries like the United States, Great Britain, Australia and New Zealand that have adopted privatization schemes, certain areas of public policy have been hollowed out and you can wander around these systems for days without finding someone in government service delivering healthcare, mental health, or job training, just to give a few examples.
When the instruments of governance – services delivery, eligibility determination, and regulation - are in the hands of many actors inside and outside of government, what is the governmental role? In my work on what I call “the hollow state” I’ve found that when it comes to government’s role in contracting out services to third parties, it can get reasonable performance from either for profit or nonprofit organizations if there is reasonable stability, a reasonable degree of centralization between government and the lead contractor, and a reasonable level of resources given the size of the clientele to be served.
These conditions – stability, centralization, and resources – don’t occur without a great deal of forethought on the part of the government and those bidding on the contracts. I fear that governments have a tendency to assume that the hollow state doesn’t govern. It clearly does although differently. This I think is the real challenge for people like me and other deans and directors of schools of government and public policy.