* Article archived from the Cornell University website on September 4, 2014
Kodras, Janet. 1997. “Restructuring the State: Devolution, Privatization, and the Geographic Redistribution of Power and Capacity in Governance.” Pp. 79-96 in State Devolution in America: Implications for a Diverse Society. Ed. Lynn Staeheli, Janet Kodras, and Colin Flint. Urban Affairs Annual Reviews 48. Thousand Oaks, CA: Sage.
Kodras addresses the three most important ways in which government can change public service provision:
- Privatization
- Dismantling
- Devolution
Taking from the topical literature, Kodras summarizes arguments and counter-arguments for a change in provision service responsibility. From the larger quantity of arguments against, I surmise that Kodras is concerned about the impacts of government service provision change.
The major thread running through the arguments against a change in government services is the inadequate capacity of local and state governments, not-for-profit institutions, and individuals to provide goods and services. The national government has access to fiscal resources that other entities do not, as well as to technical expertise that may not be available to a small community in upstate New York.
- Privatization – transfers the functions of government to commercial firms and nonprofit organizations
- Pro: Market competition increases efficiency and service quality.
- Con: Competition in service provision is often absent, resulting in monopoly rather than greater efficiency.
- Dismantling – eliminates government responsibility for the goods or services
- Pro: Nonprofit organizations are more highly attuned to community needs than is government, and instill a sense of civic pride.
- Con: Nonprofit organizations are very localized and geographically fragmented. They are an insufficient substitute for the local state regarding both capacity and scope. Responsibility for services no longer provided by government often falls to individuals without the resources to provide them.
- Devolution – transfers responsibility from higher to lower levels of government
- Pro: Government closer to the people is more flexible.
- Con: Creates inequities in service provision due to geographic differences in expertise, material and financial resources, infrastructure, and political will. State or local governments often do not have the capacity to provide services that a higher level of government does.
Local governments are less capable of competing in the world market than is a national government which can provide uniform standards and regulations, and fiscal redistribution for inequities created by competition.
Devolution creates competition between state and local governments which, in the case of essential government services and economic development, sometimes promotes efficiency. To some degree, devolution allows for the most locally applicable provision of certain services and the best locations for industry and retail economic development. But local governments compete for manufacturing with tax abatement incentives, free land, cheap labor, and infrastructure investment that can end up costing the local government more per job than is yielded by the investment, and is a zero sum game for the state and nation.
In the case of social welfare services competition can spur a race to the bottom. When social services are not uniform across space, citizens perceive that recipients move to the areas with the highest benefits. Residents in areas with relatively high benefits do not wish to subsidize outsiders and urge the government to reduce benefits.
