Many people are calling for the privatization of almost everything: schools, utilities, prisons, armies, and more. They claim that a private corporation will be more efficient than a government operated entity. The skeptic should ask what is meant by efficiency and what other values would be lost with privatization.
For example, if a private company operates a prison will a lower cost per prisoner come with a lower cost for security?
If a private company operates something, will it be calling for less regulation, regulations that could be protecting public safety and public health. For example, BP was state-operated for a long time, and then Margaret Thatcher privatized it. Apparently the deadly accident rate has gone way up because costs were cut to keep profits way up.
If private schools take away selected students from public schools, will the students left have fewer role models for success? Many "failing" schools do graduate successful students.
Regardless of the form of an organization, three ingredients are needed for success: clear goals, management that understands those goals, and sufficient resources to meet those goals.
For more, see "When Public Outperforms Private in Services", Eduardo Porter, New York Times, 2013-01-15. See also the book that he mentions, "The Org: The Underlying Logic of the Office" by Ray Fisman and Tim Sullivan.
