

Public and private sector efficiency - jrepin
http://www.psiru.org/reports/public-and-private-sector-efficiency

======
ah-
Written by the EPSU, from the last page:

EPSU is the European Federation of Public Service Unions. It is the largest
federation of the ETUC and comprises 8 million public service workers from
over 275 trade unions; EPSU organises workers in the energy, water and waste
sectors, health and social services and local and national administration, in
all European countries including in the EU’s Eastern Neighbourhood.

~~~
bildung
Well sure, I'd be surprised if the Cato Institute would have published that ;)

It apparently is just a publication covering the results of several meta-
analytical studies, EPSU neither did studies themselves nor seemed to have
been involved in those mentioned in the publication. The real content starts
at page 7.

edit:typo

~~~
bjterry
The problem is that because of their obvious bias, we can have no assurance
that they are accurately surveying all of the available meta-analyses, and
that they are properly representing the information and its level of
certainty.

~~~
bakhy
That is true, but one should still give it a read, instead of dismissing it as
lies just because it was commissioned by a union.

Some pretty interesting stuff is included, from very interesting sources,
pretty certainly not pro-worker biased.

And ultimately, if public-private partnerships, privatizations and the like
were consistently good, it would be a struggle to find studies that do not
corroborate this. Here we have a tonne of studies from various sources, none
finding these fabled results.

------
bakhy
Good to see serious empirical work tearing down the tenets of neoliberal
ideology. Too many things get accepted as self-evident truths.

I'm always curious about the profit in the private-public-partnership stories.
The reduction in waste, even if it were real, does not just go back into the
budget - a part of it must leak out as profits (a manifestation of the second
law of thermodynamics in economy, maybe). So, taxes -> profits. Not a problem,
I guess, if the contracts between gov and corporations are not too long-term,
the competition is healthy, and the tenders are not rigged. Now, that's
interesting - the government is assumed to be too corrupt and incompetent to
manage these jobs itself, but when it comes to organizing an honest,
competitive tender, it's doing that perfectly? :)

And, ultimately, a company on the market is driven to be efficient, that's
easy to understand. But a company with a multi-year tender is not on the
market.

~~~
waps
I love how the entire website is coloured red. I wonder why they went with
that particular colour ?

~~~
bakhy
And I wonder how such trolling as yours manages to pass unmoderated. I guess
even this site is not without its bias.

------
jokoon
There is a good reason the public sector operates at a loss, it's because it
serves the interest of the entire country, which no company can pretend
working for.

If for example some bus company operates at a loss and receives public
subsidies, it's because it can allow people who can't afford gas to go to a
job, which is a net gain for the country as a whole.

While it's true that the democratic process is not always working very well,
it's the reason why the public sector is not always efficient. But it's much
better than an autocratic system. Democracy is just the least worst system
there is.

A company has only inputs and outputs for the sake of check and balances,
accounting's only role is to make sure it belongs in a sound economic logic,
while a government is a single monolithic machine, often interacting with
companies, but for the interest of the citizens.

(I did not invent all of that I heard chomsky talk about "operating at a
loss".)

~~~
programmarchy
That seems a bit idealistic. Is the War on Drugs serving the interest of the
entire country? How about the War on Terror? Of course not.

Nothing democratic is ever serving "the interest of the entire country", if
such a thing even exists. If it was, then why would such a thing ever need to
be voted upon?

That the government operates in the interest of citizens is only what we say
the government ought to do, which is not actually what it does. On the
contrary, there are greater incentives for the government to operate primarily
in its own interest, to increase the scope and magnitude of its power, which
as can be easily observed, is what it has been doing.

~~~
waps
Sure, but if you're this cynical you could also make a strong argument [1]
that companies work, or fail to work, to improve the life/goals of the
managers of the company. Shareholders and employees get screwed on a regular
basis.

No private company even pretends to be serving "the market" either. That's the
beauty of it, in theory. Nobody in the private sector is working "for" the
private sector. And yet (in theory) it works.

[1]
[http://en.wikipedia.org/wiki/Stephen_Elop](http://en.wikipedia.org/wiki/Stephen_Elop)

------
fsloth
Well, as the percieved public/private divide goes there is also the rampant
free market ideology being a strong part of our zeitgeist which usually
includes glorification of private enterprise and dismissal of the efforts of
the public sector.

Usually most people doing the work in both are just regular people whose work
ethic depends on the general culture and not upon private/public divide. I.e.
nepotistic governments probably function as a part of an equally nepotistic
economy and so on. IMO, IANE (I am not an economist ;) ).

~~~
dublinclontarf
Depends where you're from, living in the UK, growing up in Republic of Ireland
I can say that over here there is not the rampant free market ideology that
exists in the States.

I can also say that when things become less regulated or get taken over by the
private sector they are far FAR better than when under government thumb.

Case in point being privatization of Telecom Éireann and the liberalisation of
fixed line phones and internet. Prior to this you'd wait 4-6 months to get a
new line(now it's days/weeks). Ryanair is another one, because of them air
travel in Europe (in particular Ireland) became affordable.

I personally have experienced the difference when things moved from the public
to the private sector and the improvements as a result.

The latest that comes to mind is Royal Mail, since it's been privatised I get
post and packages on a Sunday!

~~~
Layke
No offense, but personal anecdotes are not evidence. If you are sincere, and
you could be for all I know, it should be easy and desirable for you to
produce factual information or documented sources that supplement your story.
Otherwise, we can't take this as credible evidence.

~~~
fsloth
"We can't..."

UK has had a fairly strong market liberalization starting from Margaret
Thatchers reign 30-something years ago.

e.g.
[http://en.m.wikipedia.org/wiki/Privatisation_of_British_Rail](http://en.m.wikipedia.org/wiki/Privatisation_of_British_Rail)

What do you think happens when a state monopoly is suddenly privativized
without serious competition in the market?

------
tapesonthefloor
Ontario's provincial Auditor General just produced a report on our increasing
use of PPPs in areas like services and infrastructure. It's available here:

[http://www.auditor.on.ca/en/reports_2014_en.htm](http://www.auditor.on.ca/en/reports_2014_en.htm)

One conclusion is that residents of Ontario have spent up to $8 billion extra
for the privilege of having private industry handle projects that could have
been managed and financed publicly.

One wonders the extent to which this private industry has infiltrated
government to work on the inside for its own benefit.

A Story on the auditor's report:

[http://www.thestar.com/news/canada/2014/12/10/ontarios_mispl...](http://www.thestar.com/news/canada/2014/12/10/ontarios_misplaced_and_expensive_fascination_with_publicprivate_schemes_walkom.html)

------
craigyk
I've long suspected that the efficiency of the private sector is greatly
exaggerated. In the minds of the public, the huge percentage of businesses
that fail, often from strategic missteps or inefficiency, don't seem to get
factored in. It seems to be about comparing the Fortune 10 vs. all of
government.

~~~
roganp
That is the point, I think. Inefficient private enterprises go belly up, and
therefor stop being inefficient. There is no such corrective mechanism for
government organizations.

~~~
nn3
This may be true for startups after the venture capital runs out, but in a lot
of medium to large companies few highly profitable ventures subsidize a lot of
inefficient ones.

Occasionally someone may decide to start "trimming the fat": that is not
different in public or private enterprises.

------
forinti
The public sector is under a lot more scrutiny than the private sector (in
some countries you can track every penny spent by the government). Its
inefficiencies and faults are on the media every day. That, I think, is why
people usually see the private sector as better than the public sector.

------
PeterWhittaker
Summary (from TFA): "...there is now extensive experience of all forms of
privatisation [with] many studies of... comparative technical efficiency...
results are remarkably consistent across all sectors and all forms of
privatisation and outsourcing: there is no empirical evidence that the private
sector is intrinsically more efficient. The same results emerge consistently
from sectors and services which are subject to outsourcing, such as waste
management, and in sectors privatised by sale, such as telecoms."

------
mattgibson
I've always assumed that the privatisation game is so easily corrupted and
rigged towards milking the taxpayers with one-sided deals, that the losses
offset any potential efficiency gains. So many anecdotal stories that I've
lost count. Seems I may have been right scientifically, rather than just
bitter (for once).

------
known
Public sector can PRINT currency. Private sector has to EARN money.

