Privatization: It's Here Locally, Nationally and Globally

By Shapiro, Leslie S. | The National Public Accountant, October 1996 | Go to article overview
Save to active project

Privatization: It's Here Locally, Nationally and Globally

Shapiro, Leslie S., The National Public Accountant

In the August 1996 edition of the National Public Accountant, I wrote about privatization. I again wrote about it in last month's edition. At the risk of "overkill," I am devoting yet another article to a subject having the potential of greatly modifying the manner in which accountants deal with the government relative to their own affairs and on behalf of clients.

I recently returned from the convention of the American Legislative Exchange Council. Privatization of the work of government, particularly at the state level, was a subject the convention attendees could not escape. The prevalence of the discussions about privatization and the views of the state legislators reinforced my belief that the concept no longer is being considered as something that may occur in the distant future. It is upon us. It already has started and eventually will hit all aspects of our lives. While privatization of the work of state accountancy boards may have the most direct impact on us and clearly is that to which we must be the most sensitive, there is a movement in the United States for pervasive privatization. Further, privatization is a global occurrence. There have been major privatization accomplishments in a number of other countries. Great Britain, New Zealand and Argentina are but a few.

Privatization is a concept that transfers to the private sector functions traditionally performed by the government. There normally is some oversight by the government of those functions. Privatization in great measure is a result of the federal, state and local governments efforts to deregulate and to reduce the size and cost of government. A thoughtful paper written by GTECH Corporation on the trend toward lottery privatization pointed out four objectives of privatization:


The underlying objective is that the private sector bears most, if not all, of the burden of capital outlays and other significant expenses. Together, public and private partners share in the risks and rewards of the enterprise, thereby creating an incentive to invest in the business as it grows. Private sector companies seek to invest only in projects with a demonstrable and attractive return.


Efficiencies achieved by the private sector benefit the state and its citizens. For example, if a state wishes to utilize its lottery system for the delivery of other state services such as electronic benefit transfers or other forms of licensing and registration, the state can benefit from economies of scale.


Additional outsourcing results in the establishment of additional private sector jobs. The private sector takes on the responsibility for employee pensions, thereby releasing the state of a long-term financial obligation.


Private vendors must be willing to invest in the programs and resources required for revenue growth. Again, the public/private partnership provides the opportunity for shared risks and shared rewards.

The objectives delineated above contemplate "businesses" traditionally handled by government, such as the U.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Privatization: It's Here Locally, Nationally and Globally


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?