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Fall 2007

ISSN 0890-913X

Volume 23, Number 1

Categories: Politics | Fall 2007

Is Contracting Out Government Services the Great Panacea? Evidence from Public School Transportation in Louisiana

E. Bruce Hutchinson, The University of Tennessee at Chattanooga

Leila J. Pratt, University of Tennessee at Chattanooga

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JournalofPrivateEnterprise,VolumeXXIII,Number1,Fall2007IsContractingOutGovernmentServicestheGreatPanacea?EvidencefromPublicSchoolTransportationinLouisianaE.BruceHutchinsonUniversityofTennesseeatChattanoogaLeilaJ.PrattUniversityofTennesseeatChattanoogaManyadvocatesofmarketspointtotheinefficienciesofgovernmentbureaucracyandofferprivatizationplansastheirsolution(CatoInstitute,2003,327-335).Butinmanycasestheirprivatizationplansarenotpureprivatizationinwhichgovernmentsellsitsassetsandexitsanareacompletely.Instead,manyofthesocalledprivatizationplanssimplyreplacegovernmentcontractswithitsownemployeeswithgovernmentcontractswiththirdparties.Theservicesarestillfundedbytaxes(asopposedtouserpurchases),andthepeopleprovidingtheservicearestillselectedandhiredbygovernment,sothesituationisfarfromafree-market.Whilemanyimplythatcompetitiveoutsourcingmustleadtolowercosts,thisisnotnecessarilythecase.Althoughthegoalofoutsourcingofgovernmentservicesistoharnessthebenefitsofcompetitionbymakingmanygroupscompeteforacontract,thesituationisfarfromafree-market.Whengovernmenthiresitsownemployees,itselectsfromacompetitivepoolofpeople,butthisdoesnotguaranteeanythingclosetoagoodoutcome.Benson(1994,46)writes,Privatefirmsinfreemarketsmustpersuadeconsumerstobuytheirproducts.IndividualconsumersarethesourceofE.BruceHutchinsonandLeila.).Pratt67

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Title	Is Contracting Out Government Services the Great Panacea? Evidence from Public School Transportation in Louisiana
Authors/Creators:	E. Bruce Hutchinson, The University of Tennessee at Chattanooga Leila J. Pratt, University of Tennessee at Chattanooga
Year:	2007
Volume:	23
Number:	1
Pages:	67 - 83
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Government policy, Bureaucracy, Privatization, Private enterprises, Market economy, Public transportation

Citation:
Hutchinson, E. Bruce; Pratt, Leila J. / 2007. "Is Contracting Out Government Services the Great Panacea? Evidence from Public School Transportation in Louisiana." The Journal of Private Enterprise, 23(1): 67-83.