Local government restructuring: Privatization and its alternatives

Local government restructuring should no longer be viewed as a simple dicho tomy between private and public provision. A 1997 survey, of chief elected township and county officials in New York shows that local governments use both private and public sector mechanisms to structure the market, create c ompetition, and attain economies of scale. In addition to privatization and inter-municipal cooperation, two alternative forms of service delivery not previously researched-reverse privatization and governmental entrepreneurs hip-are analyzed here. Logistic regression on the 201 responding government s differentiates the decision to restructure from the level and complexity of restructuring. Results confirm that local governments are guided primari ly by pragmatic concerns with information, monitoring and service quality. Political factors are not significant in the restructuring process and unio nization is only significant in cases of simple restructuring (privatizatio n or cooperation used alone). Fiscal stress is not a primary motivator but debt limits are associated with more complex forms of restructuring. Restru cturing service delivery requires capacity to take risks and is more common among experienced local officials in larger higher-income communities. Res tructuring should be viewed as a complex, pragmatic process where governmen ts combine public and private provision with an active role as service prov ider and market player. (C) 2001 by the Association for Public Policy Analy sis and Management.