Privatizing vs Contracting: It's a Real Difference

Privatizing vs Contracting: It's a Real Difference

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.