PIA 2528 Governance Local Government and Civil Society

PIA 2528 Governance, Local Government and Civil Society

Reminder- Paper Requirements • Individual research paper and Panel Presentation - 30% of Grade; • Basis of Paper- Individual Work Plans but may be supplemented by other reading • Next week- Be able to present and turn in a 1 -2 paragraph paper proposal

Privatization and Contracting Out A Survey of the Literature. Continued (Review and Reminder)

Governance, Local Government and Civil Society Mega Themes: Ø THE ROLE OF INTERNATIONAL DONORS Ø Ø PRIVATIZATION AND CONTRACTING OUT NEGATIVE IMPACT ON CIVIL SOCIETY

Local Government and Civil Society: THE PROBLEM Review of Systems Factors ¡ ¡ Models of Social Services Systems: The Context of Privatization and Contracting

Overview: New Public Management Principles- ¡ Focus on Service Delivery ¡ Privatization ¡ Contracting Out

New Public Management Principles. Continued ¡ Subsidiarity ¡ Anti-Corruption Measures ¡ Re-inventing Government

Definitions ¡ ¡ Privatization- The Private Provision of Services Contracting Out- The Means of Delivery

Literature ¡ Madsen Pirie, Dismantling the State: Theory and Practice of Privatization (Dallas, TX: National Center for Policy Analysis, 1986). ¡ E. S. Savas, Privatization: The Key to Better Government (Chatham, NJ: Chatham House, 1987).

Literature ¡ Gabriel Roth, The Private Provision of Public Services in Developing Countries (Washington, D. C. : World Bank and Oxford University Press, 1987).

Private Provision—Contracting Choices: Gabriel Roth ¡ Private Sector Controversies l ¡ Contracting vs. Grants l ¡ Indigenous vs. Foreign (or Pariah) Sub-contracting and sub-grants: Blurring the lines Making the Choice

Private Provision—Contracting Choices- Continued ¡ Contracting and Non-profits l ¡ ¡ Issues of privilege and subsidies Debates about transaction costs and profits Cost recovery vs. subsidies

Reasons Given for Privatization a. High Production costs b. Low levels of efficiency c. Featherbedded labor costs d. Pork Barrel Capital Allocations (The Bridge to Nowhere)

Reasons Given for Privatization-2 e. Low level consumer input f. Poor Maintenance and loss of service g. Inability of political leaders to impose cost control h. Free Riders Problem

Criticism of Privatization a. Private sector and NGOs are not necessarily more effective and efficient than government agencies (Paul Nelson) b. Loss of Coverage for social services (Rule of Structural Adjustment)

Criticisms of Privatization c. Can replicate private sector within government (This is the core of Reinventing Government argument-Osborne and Gabler) d. Need to deal with Corruption

Coffee Break ¡ Fifteen Minutes

Literature ¡ ¡ Robert Klitgaard, Controlling Corruption (Berkeley: University of California Press, 1988). David Osborne and Ted Gaebler, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector (New York: Plume Books, 1992).

Reinventing Government: David Osborne and Ted Gaebler 1. Steering Rather Than Rowing (limited contracting)- Weberian Bureaucracy: Bankrupt? 2. Customer Driven Government 3. Competition within Government and between units and Entrepreneurial Government

Reinventing Government, Cont. 4. Earning as well as spending--charging fees and selling goods and services 5. Key is decentralization not privatization 6. Third sector vs. Private sector Use of Non-governmental organizations rather than Privatization

Reinventing Government: David Osborne and Ted Gaebler, Cont. 7. Community Based Government l Subsidiarity 8. People as citizens or consumers l Is there a difference? l TQM—add on to consumers 9. Government agencies compete with themselves

Reinventing Government: David Osborne and Ted Gaebler, Cont. 10. Mission vs. Rules based government: l NASA and the Moon—Output based government 11. Incremental vs. Zero Based (or targeted) budgets 12. Decentralization l The Circle Rounds

Corruption Debates Privatization enhances corruption. Enhanced by cultural differences (Gifts vs. Kickbacks; corruption as lobbying the Executive. Robert Klitgaard)

Corruption—the Real Problem? Robert Klitgaard ¡ ¡ Corruption as functional and cultural? Causes of corruption l Poverty vs. ethnicity

Corruption, Cont. ¡ The Ethical Issues in a society of poverty l Obligation to family vs. obligation to society ¡ ¡ The starving children problem Are there benefits from corruption? l Getting things done means paying for it

Corruption—the Real Problem? Robert Klitgaard ¡ “Rent Seeking” l ¡ Charges higher than market price Corruption l Too much government or too much privatization

Corruption—the Real Problem? Robert Klitgaard ¡ Corruption: l l l ¡ Graft Bribery Nepotism Kickbacks Insider bidding (wired) Can and should corruption be controlled?

Group Discussions: Africa Bastian and Luckham. Governance Structures Manning- The Francophone Touch Berger- On Africa Picard Stuff

Discussion- Caribbean and Latin America ¡ ¡ Nickson- Local Governance Wunch and Olowu- The decline of the State ¡ Clayton- Service Delivery Issues ¡ Picard Stuff

Discussion- East and South Asia ¡ ¡ Cheema and Rondinelli Richard Reeves- Peshawar and 9/11 ¡ Goodwin and Nacht ¡ Picard Stuff

Discussion- East and South East Asia ¡ Stanley Karnow: Vietnam and the Philippines ¡ Bhatt, Decentralization ¡ Harrison and Huntington- Culture ¡ Picard Stuff

Summary Discussion ¡ Where are we now? ¡ What don’t we know?