Privatization is traditionally seen through the lens of Administrative analysis, which views the process as a series of choices available to public officials that would allow them to make government work more efficiently, or Economic analysis, which presents privatization as the result of modern tendencies to restrict the role of government intervention in the market. The authors introduce a political perspective to this process and emphasize pragmatic privatization as a means of cost-cutting, tactical privatization as a way of rewarding allies, and systemic privatization to change institutional structures and societal ideologies. Systemic privatization is the primary focus of the three.

There are three limitations to the administrative and economic views of privatization. First, these theories have differing views of the public sector. The administrative view sees the government as good with a desire to provide proper services to its citizens while the economic view sees government as an economic player and motivated by self-interest. Second, The choice of a particular form of privatization can be less significant than how privatization is actually formulated and implemented(189). What this means is that the goal of the privatization effort is what should be important and will be affected by implementation. In some cases it may be to create a greater organizational structure, or to shed expenses from the budget. Each case will require a different process to achieve the stated goals once a form of privatization is chosen,. Third, both views pay little attention to the political dimensions present and the different interests of particular groups or classes in society. There will always be differing opinions on the shifts of power created by privatization.

Administrative Economic Political

p. 191

The argument of Feigenbaum and Henig is that the broad privatization movement is, in many of its manifestations, better understood as a political phenomenon(190). First is pragmatic privatization which is a short-term solution to immediate problems. Many times this involves contracting out public services in order to save money. Second is tactical privatization which is aimed at short term political interests. The goal is to attract allies and reward supporters. This method is a form of political opportunism.

The final type of privatization is Systemic and is aimed at reshaping entire societal expectations of what government should do and should be responsible for. Pursuing systemic privatization is often contrary to political rationality because outcomes are long-term and difficult to foresee. The hope is that individuals will have to seek a new means of problem solving outside of the public sector. The best example of this would be in Eastern Europe where changes in government structure have created changes in social ideologies. Many goods and services that were once considered public have been shifted to the private sector and perspectives of the role of government are changing significantly.

Pragmatic Tactical Systemic

p. 203

Systemic privatization may take three forms. First, there could be a change in the way that organized interests would pursue their goals. A withdrawal of government would cause groups to interact with each other rather than with government and change the political features of the lobbying process. An example may be contracting out a previously public service and undermining the strength of labor unions. This creates a power shift(200) and may apply to many other groups. The second form is to change the values and culture of society by changing their expectations of what the public sector would be responsible for providing. This form deals strictly with perceptions of what government should be expected to provide and to cultivate an understanding of what should be private or public. It is not a concrete shift in responsibilities, but rather of mindsets. Eastern Europe has seen this form of perceptual shift(201) while governments continue to sell previously public enterprises in an attempt to create markets and shift reliance to the private sector. The third form is an institutional shift(201) which would move legal, political, and economic responsibilities into the private sector. It is meant to shift social control from bureaucracies and politicians to the market. The goal is to find market solutions for previously public matters.