Graeme Hodge - Privatization: An International Review of Performance

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Privatization

Theoretical Lenses on Public Policy

Series Editor, Paul A. Sabatier

Privatization: An International Review of Performance, Graeme A. Hodge

Theories of the Policy Process , edited by Paul A. Sabatier

Games Real Actors Play: Actor-Centered Institutionalism in Policy Research, Fritz W. Scharpf

Other People's Money: Policy Change, Congress, and Bank Regulation, Jeffrey Worsham

Policy Change and Learning: An Advocacy Approach, edited by Paul A. Sabatier and Hank C. Jenkins-Smith

Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective, Elinor Ostrom, Larry Schroeder, and Susan Wynn

Parties, Policies, and Democracy , Hans-Dieter Klingemann, Richard I. Hofferbert, and Ian Budge

Privatization

An International Review of Performance

Graeme A. Hodge
Monash University, Melbourne Australia

Theoretical Lenses on Public Policy

First published 2000 by Westview Press

Published 2018 by Routledge
711 Third Avenue, New York, NY 10017, USA
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

Routledge is an imprint of the Taylor & Francis Group, an informa business

Copyright 2000 Taylor & Francis

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Notice:
Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

Library of Congress Cataloging-in-Publication Data
Hodge, Graeme A.
Privatization: an international review of performance / Graeme A. Hodge.
p. cm. (Theoretical lenses on public policy)
Includes bibliographical references.
ISBN 0-8133-6682-8 (hc.) ISBN 0-8133-6681-X (pb.)
1. PrivatizationComparative method. I. Title. II. Series.
HD3850.H59 1999
338.9dc21
99-37926
CIP

ISBN 13: 978-0-8133-6681-4 (pbk)

Contents

1. ii

Guide

Tables

Figures

As with all major projects, a longer list of people have contributed positively toward this book than will be possible to thank here. My thanks go to my work colleagues at both Monash University and Monash Mt. Elisa Business School, including Alex Owen, Graeme Macmillan, Phillip MacLeod, Rob Hyndman, and Bill Russell, and to the library staff at the Monash Library. A big thank-you to all of you. Whether smoothing the journey through willing and positive conversations, gathering literature, or through unstinting explanations and clarifications on many meta-analytic or mathematical modeling issues, I acknowledge your assistance and contributions.

Most of all, I would like to note with much thankfulness and appreciation the ever-present support and love of my wife Stephanie, Always willing to assist and nurture, I dedicate this work to her. To my sons, Anthony, Christopher, and Michael, I thank you from my heart. For all the times when you graciously allowed Dad to continue working on "his project," I appreciate your patience.

Graeme A. Hodge

• ANOVA analysis of variance
• ARIMA auto-regressive integrated moving average (ARIMA) transfer function technique
• CCT compulsory competitive tendering
• CTC competitive tendering and contracting
• DAO Dissertation Abstracts Online
• GBE government business enterprise
• GDP gross domestic product
• GDR German Democratic Republic
• GNP gross national product
• IMF International Monetary Fund
• IT information technology
• LDCs Less developed countries
• NCPA National Center for Policy Analysis
• OECD Organisation for European Cooperation and Development
• PAIS Public Affairs Information Service
• PSRC Public Sector Research Centre (NSW)
• PSBR Public Sector Borrowing Ratio
• R&D research and development
• RMIT Royal Melbourne Institute of Technology University
• RoE return on equity
• RoS return on sales
• SOE state-owned enterprise
• TFP total factor productivity
• TQM total quality management
• USGAO United States Government Accounting Office
• USSR Union of Soviet Socialist Republics

PART I
Concepts Underpinning Privatization

1
Introduction

The 1990s are a significant time of change for governments throughout the world. One major economic and social issue in many countries is that of reforming organizations across the public sector. These reforms have been driven by several considerations. Citizens are certainly looking to get more for less from government as a whole. There is increasing pressure from all fronts for reduced funding. Simultaneously, there are also significant community expectations for marked improvements in government practices in terms of economic efficiency and service delivery. Many improvements expected of the public sector are modeled on those of the private sector. For example, a greater customer focus is expected across government. Old methods and procedures are being increasingly challenged, and service delivery practices and standards are being subjected to review.

These drivers of reform are leading to a renewed questioning of not only the practices of government but its structures, processes, and service delivery mechanisms. The very roles and responsibilities of government are being opened up. In providing services, there is now a requirement to benchmark and to openly demonstrate competition and efficiency.

This review follows these pressures for change and the imperatives that are inherent within them. This book aims not to provide a fashionable statement of current trends in service provision, but a careful and measured review of empirical findings in contracting out and the sale of government enterprises. Such a considered review is in keeping with the simultaneous requirements of the public sector both to review service delivery improvement options, and to be held accountable to the public in adopting those changes that clearly do lead to enhanced performance.

Government uses a significant proportion of the resources of a nation. For example, projected government outlays as a proportion of the U.S. gross domestic product (GDP) were around 33.1 percent in 1998, and for Organisation for Economic Cooperation and Development (OECD) countries around 39.2 percent on average. Of this, a significant part is related to the provision and production of goods and services.

In the past two decades a series of reforms have flowed through the business sector and through government. In most cases, these reforms have been international in significance. Although their objectives have varied, each has in one way or other claimed to be able to increase productivity and enhance the effectiveness of operations. These reforms have spawned an industry of expert publications including books, manuals, and guidelinesall aiming to ensure that the busy executive is brought up to date with the latest imperative that, if you believe the sales pitch, is now urgently required for the ongoing success of their business.

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