Source: Composite image by G_marius
Do you think private management is more efficient than public management and that public services should be privatized? Vote and share your views (poll and comment section below)
Should public services be privatized?
The balance between publicly managed services and institutions and the private sector is a continuous debate in capitalist societies. In the last decades, the private sector's role has been growing at the expense of the public one. Many argue that private management is more efficient than public management.
Pros and cons of privatization
Pros: Defendants of privatizations usually use the following arguments to show that public services are better when run by private companies:
- The private sector is profit driven, therefore managers in private companies have an incentive to cut costs and be more efficient.
- In a private system, public users become customers, and theoretically private companies are customer oriented, which should have the effect to improve the quality of service.
- If public services are privatized properly different companies would compete to offer lower prices (or costs).
- Decisions in private companies are less susceptible to be influenced by political or electoralist motives. The intervention of governments in the public sector can be a great problem because party interests sometimes come first than the public good.
- The government can raise funds from selling or outsourcing of public services. This funds could be invested in other services or public needs.
Cons: Many others claim than a strong public system is better for several reasons such as:
- Many public services are natural monopolies (railroad, or water distribution for example). Private monopolies tend to be inefficient and expensive, so it may be better to keep those services public.
- Profit driven services can be incompatible with public welfare. Government intervention For example, a private health insurance could refuse to insure people with higher health risks because of previous illnesses while a public service would cover everyone. Or a private company could suppress a train service to a town if it is considered not profitable. Services such as education, health, security or public transport may perform worst if privatized. There can be abuses such as the case of private telecommunication operators charging excessive roaming fees.
- Privatization may also transfer income from public budget to private hands. If a service was profitable, the privatization takes away resources from government that could be used to fund other public services.
- Private companies can also have a short term vision and may avoid investing in some necessary long term projects.
If you change your mind, you can change your vote simply by clicking on another option.
Public sector vs private sector: should public services be privatized?
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