Three Faces of Privatization

By Kathy Abrams

The following is an excerpt from Kathryn Abrams’ chapter, “Three Faces of Privatization” from the 2016 book, Privatization, Vulnerability, and Social Responsibility: A Comparative Perspective edited by Martha Albertson Fineman, Ulrika Andersson, and Titti Mattsson.

‘This chapter will examine three of the many faces of privatization in the American legal and political system. My goal is to highlight the range of initiatives that come within this rubric; but my focus will be different than many accounts attempt. My emphasis will not be on where and how privatization is accomplished (i.e., what is privatized, through what processes, with what kinds of means ultimately being used for the provision of goods or services), though I will advert to these issues in my discussion. Instead, I will interrogate these instances of privatization with regard to three other features that are less often discussed.

First, I will consider the motivations for the shift in the provision of goods or services. Although this typological scheme will inevitably oversimplify, I will highlight three kinds of motivations for privatization. The first, which underlies the classical understanding of privatization, I will call “institutional”: state actors determine that particular services can be better or more cheaply provided by the market, or by some form of public-private partnership. This motivation usually entails a judgment that enabling recipients of a particular service to select from among a range of institutional options will result in greater satisfaction, or improvement of the service through competition, or both. Institutional privatization is often connected with a second motivation, which I will call “fiscal”: budgetary constraints make it necessary or prudent for the state to reduce or withdraw from the provision of certain services, or to outsource them to private (either for-profit or nonprofit) providers who for reasons of expertise, economies of scale, or freedom from certain kinds of regulation, provide them more cheaply. Finally, there is a form of privatization that I will identify as “moral”: in this case state actors decide to reduce or withdraw from the provision of a particular service because they have reached the conclusion that the service is morally problematic, or that it has encouraged in its beneficiaries forms of judgment or behavior that are morally problematic. The goal in these forms of privatization is not simply to withdraw from the provision of the service, but to do so in a way that incentivizes the morally preferred form of choice or behavior, or to support institutions that can provide appropriate forms of moral guidance.

In deploying this range of categories, I depart from the way that some scholars of privatization would use the term. Paul Starr’s classic article on privatization, for example, Excluded from its definition state decisions to defund rather than alter the institutional structure for the provision of goods and services (Starr, 1998). And many scholars of privatization view the term as designating the movement of service provision (or ownership of assets) from the public to the market sector, as opposed to the broader view, often associated with feminism, which emphasizes ‘’outsourcing’’ of particular tasks from the public or market sector to the private family (Cossman, 2005; Fineman, 2004). I see value however in juxtaposing the consumption of “moral privatization’’ to its more familiar “institutional” and “financial” counterparts. While each of these terms or processes reflects a withdrawal of the state from the provision of services, they reflect strikingly different assumptions about the human beings who are their focus, a feature which seems useful to bring interview. Moreover, vulnerability analysis, which asks how societies can best recognize and address the inevitable, pervasive condition of human vulnerability, suggests the importance of examining forms of privatization that place responsibility for dependency on the family or on the individual, as well as on the market.

Second, I will explore the view of the human subjects of privatization that is assumed by the privatizing state. The paradigmatic subject Who is referenced in forms of “institutional “privatization discourse is the autonomous subject in the “Republic of choice’’ (Williams, 1991): The individual or family, exercising the substantially unencumbered choice among vehicles for obtaining a particular good or service that privatization allows. The subject of pure “fiscal” privatization (although privatization, as this inquiry will suggest, is rarely purely fiscal) is a variant of this autonomous chooser: resourceful, self-reliant, and able to respond successfully to a diminution of governmental support. Where privatization is animated by a moralizing impulse, however, assumptions about the subject change markedly. This subject may be characterized as a manipulative chooser, whose opportunistic decisions serve to extract undeserved benefits from the government; or she may be described as a flawed and in capable chooser, who fails fully to apprehend the trajectory of her decisions or is easily swayed by others.

Finally, I will investigate the role of the state in relation to the subject of privatization, as it moves away from direct provision or funding of services. This role, as I will argue, can sometimes be paradoxical. In each of my examples, the state continues to engage with (former) recipients of a particular public good or service; and some of them, the state may remain as present in the lives of recipients as it was before privatization occurred. State involvement may persist when the state’s goal is to facilitate choice among institutional providers: it may retain the power to supervise the conditions of competition, or to establish the metric by which recipients exercise their choice. But state involvement is particularly likely to persist when the state is engaging in “moral” privatization: the state must retain a robust supervisory role in order to incentivize or discipline the behavior of opportunistic choosers, or to guide flawed or uncertain choosers toward morally preferred forms of behavior. That’s the question facing analysts of privatization may be not whether this date should be involved in service provision, but in what kind of role.

I will examine these dimensions of privatization through three examples the first of the field of public education, where students and their families have experienced both “privatization by attrition” and privatization through the explicit governmental creation of a regime of “school choice”. The second is the field of welfare reform, or federal governmental retrenchment in the field of public assistance and imposition of regulatory controls on the provision of assistance by states has resulted in the privatizing of costs of public assistance both onto nonprofit (and religious) providers, and onto individual families, including both mothers and non-custodial fathers. In the third area, reproductive health, the patterns of privatization result both from the gradual withdrawal by the federal judiciary of the legal infrastructure supporting reproductive choice, and from state decisions that reflect a lack of support for reproductive health services.

These examples point to two conclusions, which I elaborate below. First, the rhetorical emphasis on the “choice “a recipients that pervade privatization discourse often becomes a vehicle for shielding the non-neutral assumptions that states decision makers make about, and the varying stances and policies they employed to word, different categories of state beneficiaries. State efforts to withdraw from the provision of services to socially subordinated groups demand particular attention. And second, because privatization, in its varied iterations, may fail to grasp the way that certain needs inhere in the human condition, vulnerability theory may provide a vehicle for questioning both the direction of these efforts and the premises about the human subjects of privatization they reflect.’

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