Privatization v. “Marketization” of Government Functions
- Movement to reduce government inefficiencies
o Full-time government employees expensive
o Might be cheaper to contract for services when needed
- But principal-agent issues in non-competitive markets create difficulties
o Too much competition produces perverse incentives for contractors
o Too little competition produces inefficiency & waste
- Does a market exist -- buyers and sellers of the service compete to set the price – or are government services transferred to private ownership?
Federal Bureaucracy and Democratic
- Should president or Congress direct agencies?
- How autonomous from political influence should agencies be?
o Regulatory agencies could be harmed by partisan political interference
o But agencies develop interests and agendas of their own
agency fulfilling the public good?
- How autonomous from citizens, firms and associations should agencies be?
o Iron Triangle and issue-networks
o Risk of “agency capture”
they serve the public or serve government?
- Bureaucratic Discretion
o Should agencies not enforce “bad” laws?
o Should the public good override bad legislation?