Saturday, June 25, 2011

Indiana's bumpy road to privatization

Though the $1.37-billion project proved disastrous for many of the state's poor, elderly and disabled, it was a financial bonanza for a handful of firms with ties to Daniels and his political allies, which landed state contracts worth millions.

The disparate effects underscore the risks of handing control over public services to the private sector. Whether the approach will ultimately improve services and save money remains a matter of fierce debate in Indiana. But the state's experience shows that without adequate safeguards, privatization can compound the very problems it is designed to correct: bureaucratic burdens, perceptions of influence-peddling and a lack of competition.

It's an issue that is likely to persist, as Republicans in statehouses nationwide turn to private companies as they seek to shrink government and weaken the hold of public-sector unions. 
While this blog focuses on the problems that come with wholesale privatization of local government in the form of mandatory membership HOAs, apparently there are problems with privatizing discrete government services as well.

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