Moving Toward Market-Based Government: The Changing Role of Government as the Provider
By: Jacques Gansler
One of the major changes taking place today in government management (federal, state, and local) is the shift from the government as the historic “provider” of public services to the government as the “manager of the providers” of services to the public. The basic rationale for this change is that— when properly implemented—it results in significant benefits, in terms of improved performance and lower costs, to both the government and to the public being served. Essentially, it is a shift from a monopoly supplier (the historic government “provider”) to a competitive environment. These benefits are realized regardless of whether the winner of the competition is the public or private sector supplier.
While the empirical data (as presented in this report) demonstrate the benefits of this shift, it is still not widely understood or accepted. Part of the resistance is the natural fear of change, especially if jobs are at stake. Another part of the resistance is due to understandable confusion over the details. The wide variety of approaches (public-private competitions, outsourcing, privatization, public-private partnerships, government entrepreneurships, etc.) adds to this confusion. Moreover, there has been little effort made at defining terms, collecting data and lessons learned, documenting best practices and case studies, and developing educational programs in this area. It is the purpose of this report to help in this regard.
The report is divided into sections. The first section, “Understanding the Issue,” provides the background and the highlights of the various sourcing options. Each of the second through sixth sections examines one approach and, for each approach, provides a clear definition; summaries of example case studies (e.g., for competitive sourcing, for privatization, etc.); a discussion of strengths and weaknesses; lessons learned/best practices; actual performance and cost results achieved; and other relevant considerations— such as personnel impacts, small business considerations, and government management-control perceptions. And, in each area, detailed references are provided for the reader who wants to pursue further the specifics of the implementation for a particular issue.
The seventh section of the report, “Contractors in Security Operations: A Special Case,” examines an area that, although not a unique sourcing option, has become a high-interest item for the Department of Defense and numerous other agencies—namely, using contractors in security operations (including combat)—and describes the special considerations for this area along with some example cases.
Finally, “Findings and Conclusions” discusses the six common arguments against changing the role of government, summarizes the actual results achieved for each of these areas, and presents specific recommendations for moving forward.
It is hoped that the material in this report will help in providing a better understanding of this important—and, the author believes, essential— shift in the way government will provide its public services in the 21st century.