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Warner, M.E. and A. Hefetz, 2003. "Rural-Urban Differences in Privatization: Limits to the Competitive State," Environment and Planning C: Government and Policy, 21(5): 703-718.

Despite two decades of experience with privatization, U.S. local government use of contracting in public service delivery remains relatively flat. Market approaches to public goods provision emphasize the competitive state, and attribute limited privatization to bureaucratic resistance. Rural development theory emphasizes the uneven impact of market solutions in rural communities. Using national data on U.S. local government service delivery from 1992 and 1997, we analyze differences in local government service delivery patterns by metropolitan status. Discriminant analysis shows that structural features of markets are more important than managerial capacity of government leaders in explaining lower rates of privatization among rural governments. These structural constraints limit the applicability of competitive approaches to local government service delivery. Our results suggest cooperation, as an alternative to privatization at the local level and as a source of redistributive aid at the state level, may provide a more equitable alternative for disadvantaged rural communities.

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Subject: Privatization