It’s certainly a novel approach. Almost all levels of government carry out a portion of the public’s work through private firms, but it is certainly rare to outsource the majority or entirety of it. There was a good article on the topic in Governing Magazine:
Two thoughts come to mind. First, I think it’s useful to apply a principle from macroeconomics: comparative advantage. as every first year econ student learns, some nations are better at producing certain goods than others. If we can get countries to produce (and trade) more of what they can produce most efficiently, then we can create more total value for everyone. I think the same is true in delivery of government services. If a private firm can deliver a public service more effectively than a public agency, then by all means we should contract the function. Incidentally, I would apply this same principle towards outsourcing to non-profit orgs and sharing work across agencies and jurisdictions.
Second, we need to always focus on performance and outcomes. All to often, public organizations look to shift work out to private firms without having assessed the core of the performance problem they are trying to solve, defining clear outcomes expected, or understanding how they will evaluate performance. Absent a solid framework for performance contracting, no private firm will be able to achieve better results than thier public agency predecessor.
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