Privatization in State Government: Trends and Issues

Privatization continues to be a controversial management issue in state governments. In the past five years, 1997-2002, the extent of privatization activities in the states has largely remained the same as in the previous five years or slightly increased. The main reasons for privatization are a lack of personnel or expertise and cost savings. In most cases, privatized services account for less than 5 percent of agency services, while reported costs savings range from none to less than 5 percent. But many state agency directors surveyed seem to have no clear ideas as to how much has been actually saved from privatization. Nevertheless, privatization is likely to continue in the states in the next few years as in the past decade.

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About the Authors
Keon S. Chi is editor in chief of The Book of the States and Spectrum: The Journal of State Government. He has served on the editorial board of Public Administration Review, American Journal of Public Administration, State and Local Government Review and Public Integrity.

Kelley A. Arnold is the publications and customer service coordinator for The Council of State Governments. She holds a master’s degree in communications from the University of Kentucky.

Heather M. Perkins, an associate editor of The Book of the States, is an editorial associate for The Council of State Governments. She also serves as the associate editor of Spectrum: The Journal of State Government.