Increasing evidence that privatisation and outsourcing do not work

For a generation now the assumption has been that outsourcing and privatisation are appropriate and efficient ways of providing public services.

These have always contested narratives, but increasingly this evidence is clear that market-oriented ‘reforms’ in the provision of at least health, education and public safety services have failed.

Not only do we now have the evidence, but the political will is increasingly for direct public sector provision of essential services.  That is why people vote for Bernie Sanders in the US, Jeremy Corbyn in Britain (again!), Syriza in Greece, Podemos in Spain, agains the ANC in South Africa etc etc.

For a useful review of the recent evidence see the following article:
https://www.theguardian.com/commentisfree/2016/sep/12/face-the-facts-competition-and-profit-dont-work-in-health-education-or-prisons?CMP=Share_AndroidApp_Email

The author, John Quiggin is an Australian laureate fellow in economics at the University of Queensland. He is prominent both as a research economist and as a commentator on Australian economic policy. He is a fellow of the Econometric Society, the Academy of the Social Sciences in Australia and many other learned societies and institutions.

The 2008 financial crisis laid bare many of the assumptions behind market liberalism – the theory that markets always know best, regardless of the problem. For decades, its advocates had dominated economics, helping to create an unthinking faith in markets, in which speculative investments were seen as fundamentally safe. The crisis seemed to kill off such ideas, but they still live on in the minds of many – members of the public, commentators, politicians, economists, and even those charged with cleaning up the mess. In his book, Zombie Economics, John Quiggin explains how dead ideas still walk among us – and why we must find a way to kill them once and for all if we are to avoid an even bigger crisis in the future.

Across much of the Global South we have another reason for avoiding outsourcing, contracting, private sector provision etc etc - the challenge of corruption.  Contracting is a major risk area for fraud and corruption - so if we have direct public sector provision of public services (including capital contracts, building etc) we avoid the risk - easy!!