Foreword by Dr Eamonn Butler
This report represents the most comprehensive review so far of the remarkably extensive replacement of state activities by private-sector alternatives that has occurred in recent years. But its main strength is not merely its listing of the countless examples of where private involvement - with its associated benefits of consumer choice and the stimulus of competition - has been introduced into areas once thought to be the sole prerogative of the state. Its principal contribution is to collate that wide experience into a unifying theoretical framework which helps us to identify and to understand the strategy and tactics of privatization.
The author explains that privatization arose not as a conscious strategy but as an approach to practical problems for a government that originally supposed budgetary restraints and the excision of waste to be its main policy tools. Such macropolitical ideas, says Dr Pirie, are doomed to failure: insensitive cuts remove vital services instead of administrative beneficiaries of existing programmes, and from the service providers themselves all combine to make the political obstacles overpowering. The privatization strategy, on the other hand, is techniques to each specific problem, making provision for the concerns of each interest group as it transfers activities from the public to the private sector. It is an approach which produces creative and innovative solutions to each problem, not a single solution that is imposed on each case.
From the wide range of innovative solutions that have been tested, Dr Pirie makes and impressive identification of twenty-two different techniques of privatization, and shows in the form of practical examples the numerous variations that have occurred upon each theme. The result is to clarify our thinking on what the strategy of privatization involves, the purposes and range of benefits it is expected to achieve, and how future problems might be tackled by its use.