Private Sector more Efficient than Public?

[Jacob]

These last few decades - post Reagan/Thatcher really - it's become widely accepted that privatized services are better and more efficient than those provided by the government.

These guys argue that it is not: http://www.guardian.co.uk/commentisfree/2013/apr/25/private-sector-superiority-mythbuster

Do we actually have good case studies for/ against the proposition? Are there facts that can be discussed beyond the prevailing ideological battlegrounds?

[mongers]

I've always taken it as an article of faith.

Myself, I think sometimes nationalisation has made sense, for instance the government rescue/nationalisation of Rolls-Royce in the very early 1970s, a conservative government did that and it ended up becoming one of the two or three principle aero engine makers.

[MadImmortalMan]

My company does business with county governments and they are usually very competent and productive.

The feds are a different story. They don't do anything. They just don't move. I imagine federal office buildings in DC full of people just hunched over their desks because they got so lazy they forgot to eat or breathe. Like the planet Miranda.

I'm willing to bet the UK public sector is nowhere near that bad. Probably closer to what you'd expect from one of our larger states.

[Admiral Yi]

Your link froze on me then crashed my browser, but not before I read the headline and the leder.

Based on the little I read, the argument seems specious.  The fact that one privatized line got more subsidy than different, state-owned lines tells us nothing about their relative efficiency. 

[Phillip V]

First give me money and security. Then, I will later worry about efficiency if I have the time.

[Neil]

Yeah, I'm not entirely sure that's correct.  The private sector doesn't have the public service unions to deal with, which helps them a bit.

[Josquius]

I've encountered far more waste and inefficiency when the government decides it needs to contract out to private firms than when it just gets on with things itself. That the private sector is more wasteful seems pretty common sense to me, the government just likes it as they create more jobs and help the government to fudge their accounts.

[MadImmortalMan]

Of course it does. The rules those contracts operate under mandate the waste. I could write a book on this subject.


Edit: To put it succinctly, either the government wastes the money, or they mandate that the contractor waste the money. There is no difference and nothing gained by contracting it out. Except they usually add another level of bureaucracy to manage the contracting process.

[frunk]

I think efficiency is more a function of size rather than public or private.  The bigger the bureaucracy of any organization the greater the opportunities for waste and mismanagement (internal inefficiency).  However if the organization is well coordinated increases in size allow it to tackle bigger projects without strain and self competition (external efficiency).

[CountDeMoney]

I think efficiency is more a function of size rather than public or private.

This is true.

Both have their pros and their cons.

[Grallon]

Any organization that grows beyond a certain size tends to become bureaucratic - whether it be public (govt), semi-public (unions) or private (corporations) makes no difference.  And bureaucratic organizations tend to a) foster the retention of information - b) encourage the duplication of structures and c) accelerate the dilution of accountability through the first two.  The degrees in which these phenomenons manifest themselves vary depending on the specific structure of any given organization.  In short - if one wishes to avoid the worst cases of red tape - one should insure an organization doesn't grow beyond a certain point.



G.

[CountDeMoney]

In short - if one wishes to avoid the worst cases of red tape - one should insure an organization doesn't grow beyond a certain point.

Unfortunately, that's a loser to both 1) voters, and 2) shareholders.  So both cultures are fucked.

[Grallon]

It should also be noted that once the threshold has been passed, a bureaucratic organization tend to devote most of its energies towards the expansion of its operating processes rather than towards fulfilling the purpose for which it was originally founded.




G.

[MadImmortalMan]

A company that Cal used to work for once had an air conditioner professionally inspected every day for a month because they had to spend the money in their maintenance budget before year end or pay a million dollar fine.

[Admiral Yi]

UPS and FedEx are two very large organizations that to me seem very efficiently run.