The privatization fad

December 31, 1992

It's all the rage among think-tank gurus, pop-fad writers an grandstanding politicians. Privatization. To these groups, it represents the wave of the future. Sell off government functions to the private sector and deficit problems will disappear, taxes will drop and services will improve.

It's a nice daydream, but it isn't real. Turning vast chunks of government over to the marketplace won't work miracles. It can't cure budgetary gaps created by too much spending on too many services. It can, though, provide an exciting option for some -- though not all -- government services. The problem comes in deciding what kinds of privatization approaches will work without denying citizens in need access to services.

That's the conclusion of the Maryland Task Force on Privatization. The panel noted that privatization "is a viable alternative to conserve scarce public resources" that can be used "as a catalyst to promote quality management and economic development." But it is not "the end-all and it is dangerous to assume it will always work."

Instead of plunging head-long into this fad, the task force recommends a different approach that could make privatization a permanent fixture on the state government landscape. The idea is to force managers to shift their thinking from the bureaucratic to the creative. "Privatization is not a simple matter of transferring a task from one party to another," the panel reported, "but assessing what functions government ought to perform and why; and the role the private sector should play in the delivery process. It is a management technique that brings competition into government."

Managers should be forced to propose privatization options each year at budget time. All new proposals also should undergo privatization scrutiny. A blue-ribbon Advisory Council on Privatization would oversee the process to prod and embarrass officials into pursuing options that might save taxpayer dollars and improve services.

Fans of quick sell-offs to the private sector will be disappointed by this report. It urges a go-slow approach on Baltimore-Washington International Airport, and it found the proposal from Lockheed to run the airport lacking. But the group urges a halfway step: the creation of a quasi-private authority to run a new port-airport-toll agency that would have the flexibility to respond to intense international and regional competition. This is a common-sense approach that deserves support.

We're encouraged Gov. William Donald Schaefer has embraced the notion that his managers should start to think in entrepreneurial terms. He should make the panel's recommendations part of his budget and state of the state message next month.

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