Privatization, outsourcing and public service objectives: An explorative analysis of two network industries. Issue 4 (December 2017) - Lieberherr, Eva
Highlights: The detachment of an operator from political decision-making affects public service objectives. Democratic accountability affects the achievement of public service objectives. Key sector differences are considered for translating transport and water service objectives to indicators. Abstract: A key driver of reforms such as privatizing and outsourcing services of general interest is the intended increased performance, particularly in terms of economic efficiency. However, such effects remain disputed. In this article we explore how different models of privatization and outsourcing relate to public service objectives in terms of both economic and social aspects. The governance models are differentiated based on how removed the service provider is from the political-decision making processes. Selecting two cases representing different models of privatization and outsourcing – the water sector in England and the public transport sector in Norway – we explore whether the distance between the service provider and political decision-making affects the achievement of public service objectives. To do so, we take key sector differences into consideration when translating public service objectives into indicators. The cases illustrate the relationship between outsourcing, privatization and public service objectives and offer insight to scholars interested in cross-sector comparisons.