PRIVATIZATION IN THE UNITED-STATES

In the United Stares, the two principal modes of producing local gover nment services are in-house provision by government employees and cont racting out to private suppliers, also known as privatization. We exam ine empirically how U.S. counties choose the mode of providing service s. The evidence indicates that state clean-government laws and state l aws restricting county spending encourage privatization, whereas stron g public unions discourage it, This points to the important roles play ed by political patronage and taxpayer resistance to government spendi ng in the privatization decision.