Why You Should Be Wary of Privatization

While privatization occurs under different names, such as outsourcing, contracting out, and public-private partnership, it always removes a public good from public control and places it under the control of a private entity. The specifics of these deals vary, but the consequences include a loss of democratic control, little or no cost savings, and a loss of accountability and transparency. A 2015 survey of the country’s largest water systems found that, on average, private, for-profit utilities charged the typical household 59% more than for drinking water services compared to local governments. The recommendation to alleviate this issue is insourcing, or bringing services or assets that were privatized back under public, democratic control. As governments continue to experience problems with privatization, insourcing can provide quality services and assets while making better use of public funds.