Privatizing vs Contracting: It's a Real Difference

Moneybox
A blog about business and economics.
June 22 2012 1:08 PM

Privatizing vs Contracting: It's a Real Difference

I wrote this morning that contracting out prison management isn't really privatizing anything some people responded that I was engaged in meaningless semantic hairsplitting.

I disagree. Since in non-prison contexts you can have the opportunity to do one or the other. For example, cities and transit agencies sometimes contract-out management of parking lots or parking garages that they own. This may be a good idea, but it's a totally different policy from privatizing (i.e., selling) the parking lot since one the parking lot has been privatized it might be turned into something other than a parking lot. Conversely, Compton eliminated its police department in 2000 and replaced it with law enforcement services contracted out to the Los Angeles County Sheriff's Department.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.