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Article Summary

Warner, Mildred E. 2008. "Reversing privatization, rebalancing government reform: Markets, deliberation and planning." Policy and Society 27: 163174.

The latter half of the 20th century was marked by the increased presence of markets in the realm of public service provision. Warner argues that there has been a recent resurgence in the public sector, as local governments have started to move toward a more balanced approach to providing services. The result is an evolution of the role of local government as a service provider that comingles private market tools with a reemphasis on civic engagement - one that strives for efficiency, high quality, and broad social benefits.

During the 1980s and 1990s, New Public Management advocates critiqued the traditional role of government provision of public services as cumbersome and inefficient. Instead, the New Public Management model put forth that market-based utility maximization and private management techniques would sufficiently regulate the market for public services. However, this approach widely failed to realize any in practice.

According to Warner, this failure was due to a basic misreading of market incentives. Many public services are natural monopolies and, over time, competition erodes and thus leads to reduced levels of quality and efficiency. Even where voluntary market solutions show promise, the presence of government oversight is necessary to secure property rights. Similarly, the elimination of government can put the roles and rights of citizens at risk. Government has a unique capacity to manage citizen involvement and Warner points out that, ultimately, this vacuum of both public discourse and deliberation will result in a failure of public goods. Informed and integrated participation is critical to democracy and thus government involvement is essential.

With this need in mind, we are seeing a reversal by governments away from a pure market-based approach toward more balanced, integrative methods. Public consultation - the exercise of voice - is replacing New Public Managements public choice theory, in which citizens demonstrate their basket of preferences by voting and/or relocating. It is important to note that governments are not wholly abandoning market approaches; rather, reforms are taking place to cultivate private-market benefits while establishing the public sector as a meaningful regulator, monitor and, at times, as a direct service provider. Along with the establishment of a proper legal framework, governments must also build internal capacity to manage this new form of private sector service provision, while simultaneously informing and engaging the public. Our author refers to the latter capacity as an investment in the social foundation of communities and, as noted above, acts as a critical component to democratic processes.

According to Warner, local governments role in community problem solving is the fundamental public good. In order to do this efficiently, effectively, and with respect to the highest societal benefit, government must play a substantive role in the equitable provision of public goods. To that end, it is the responsibility of government to fairly and competently manage private sector involvement and ensure the active and informed role of the public. With the reversal of the New Public Management approach, we are seeing greater movement along this course.