Down from Bureaucracy: The Ambiguity of Privatization and Empowerment

Down from Bureaucracy: The Ambiguity of Privatization and Empowerment

Down from Bureaucracy: The Ambiguity of Privatization and Empowerment

Down from Bureaucracy: The Ambiguity of Privatization and Empowerment

Synopsis

Throughout the world, politicians are dismantling state enterprises and heaping praise on private markets, while in the United States a new rhetoric of "citizen empowerment" links a widespread distrust of government to decentralization and privatization. Here Joel Handler asks whether this restructuring of authority really allows ordinary citizens to take more control of the things that matter in their roles as parents and children, teachers and students, tenants and owners, producers and consumers. Looking at citizens as stakeholders in the modern social welfare state created by the New Deal, he traces the surprising ideological shifts of empowerment from its beginning as a cornerstone of the war on poverty in the 1960s to its central place in conservative market-based voucher schemes for school reform in the 1990s.Handler shows that in the past the gains from decentralization have proved to be more symbol than substance: some disadvantaged members of society will find new opportunities in the changes of the 1990s, but others will simply experience powerlessness under another name. He carefully distinguishes "empowerment by invitation" (in special education, worker safety, home health care, public housing tenancy, and neighborhood organizations) from the "empowerment by conflict" exemplified by the radical decentralization of the Chicago public schools. What emerges is a map of the major pitfalls and possible successes in the current journey away from a discredited regulatory state.

Excerpt

It is by now commonplace to note that “decentralization” and “privatization” are worldwide movements. Not only in Western Europe and the United States, but also in the Third World, governments are trying to lessen their presence (at least in the economy), unload state enterprises, and rely more on private markets. At least in the Western democracies, common themes are reducing the role of national government, lowering public spending, reducing the direct provision of services, and intervening less in the lives of citizens. in each society, however, these ideas have different meanings and policies and raise different issues. in the United States, decentralization, deregulation, and privatization are usually thought of along two historic dimensions: the allocation of authority between units of government and between state and market. Within organizations, whether public or private, decentralization refers to the process of assigning more responsibilities to lower organizational units.

The allocations and reallocations of organizational authority are conscious activities. What drives them? in the United States, there are two strands that are mutually reinforcing. the first is the taxpayer's revolt, which began in 1978 when California voters passed a referendum sharply reducing the local property taxes. the antitax movement spread quickly to the other states as well as the national government. Not only is it exceedingly difficult to raise taxes, but there is also strong support to reduce taxes. the taxpayer's revolt—which shows no signs of abating soon— plus national and state deficits have resulted in a significant downward flow of governmental authority. As will be discussed more fully in subsequent chapters, the federal government continues to mandate state programs, and states continue to mandate county and local programs, but neither provide sufficient funding. Despite recently enacted legislation purporting to check federally imposed unfunded mandates, it is unlikely that this situation will substantially change in the near future. This tactic serves the interests of national and state politicians, but increases the responsibilities at state and local levels. More and more public activities are being carried out at the local level, and indeed, local taxes are increasing.

Another consequence of the taxpayer revolt and the resulting squeeze at the local level is the increasing use of the private sector. Here, we speak primarily of contracting public services to private for-profit or not-forprofit organizations in order to save money. Again, we will have a lot to say about privatization and contracting out in subsequent chapters.

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