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Transforming Government Through Privatization 20th Anniversary Edition Annual Privatization Report 2006 Transforming Government Through Privatization Reflections from Pioneers in Government Reform Prime Minister Margaret Thatcher Governor Mitch Daniels Governor Mark Sanford Robert W. Poole, Jr. Reason Foundation Reason Foundation’s mission is to advance a free society by developing, apply- ing, and promoting libertarian principles, including individual liberty, free markets, and the rule of law. We use journalism and public policy research to influence the frameworks and actions of policymakers, journalists, and opin- ion leaders. Reason Foundation’s nonpartisan public policy research promotes choice, competition, and a dynamic market economy as the foundation for human dignity and prog- ress. Reason produces rigorous, peer-reviewed research and directly engages the policy pro- cess, seeking strategies that emphasize cooperation, flexibility, local knowledge, and results. Through practical and innovative approaches to complex problems, Reason seeks to change the way people think about issues, and promote policies that allow and encourage individuals and voluntary institutions to flourish. Reason Foundation is a tax-exempt research and education organization as defined under IRS code 501(c)(3). Reason Foundation is supported by voluntary contributions from individuals, foundations, and corporations. The views expressed in these essays are those of the individual author, not necessarily those of Reason Foundation or its trustees. Copyright © 2006 Reason Foundation. Photos used in this publication are copyright © 1996 Photodisc, Inc. All rights reserved. Authors Editor the Association of Private Correctional & Treatment Organizations • Leonard C. Gilroy • Chris Edwards is the director of Tax Principal Authors Policy Studies at the Cato Institute • Ted Balaker • William D. Eggers is the global director • Shikha Dalmia for Deloitte Research—Public Sector • Leonard C. Gilroy • Roger D. Feldman is a partner in the law firm of Bingham McCutchen LLP in • Adrian T. Moore Washington, D.C. • Amy Pelletier • Lawrence L. Martin, Ph.D. is a • Robert W. Poole, Jr. professor and director of the Center • Geoffrey F. Segal for Community Partnerships at the • Lisa Snell University of Central Florida in Orlando, Florida • Samuel R. Staley • Glen McDougall is a senior research • Adam B. Summers fellow at the School of Public Policy, • Steven Titch George Mason University and president of mbs ottawa inc. in Canada Contributing Authors • Dr. Francois Melese is a professor of • Baroness Margaret Thatcher was Prime economics at the Defense Resources Minister of Great Britain and the United Management Institute, Naval Postgraduate Kingdom from 1979-1990 School in Monterey, California • The Honorable Mark Sanford is the • Grover Norquist is the president of governor of South Carolina Americans for Tax Reform • The Honorable Mitchell E. Daniels is the • Barry W. Poulson, Ph.D. is a professor of governor of Indiana economics at the University of Colorado, • The Honorable Stephen Goldsmith, Boulder is the former mayor of Indianapolis, • E. S. Savas is a professor of public affairs Indiana and a professor of government in Baruch College of the City University at Harvard University’s Kennedy School of New York of Government • Ronald Utt is a senior research fellow • John Blundell is the director general of for the Thomas A. Roe Institute for the Institute of Economic Affairs Economic Policy Studies at The Heritage • Paul Doucette is the executive director of Foundation Letter from the Editor Leonard C. Gilroy elcome to Reason Foundation’s Annual Privatization Report 2006. Now Win its 20th year of publication, APR is the world’s longest running and most comprehensive report on privatization news, developments, and trends. Since the first APR was published two decades ago, privatization has continued its evolution from novel concept to a proven policy management tool that delivers higher quality services at lower costs and more efficient, effective government. This year’s 20th anniversary edition of APR recognizes the tremendous advances in government reform over the last two decades and features special contributions by several pioneering policymakers and researchers at the forefront of privatization and government reform, including Margaret Thatcher, South Carolina Governor Mark Sanford, Indiana Governor Mitch Daniels, former Indianapolis Mayor Stephen Goldsmith, and Reason founder and transportation director Robert Poole, Jr. We are honored to have them share their expertise and insights on privatization, competition, and government reform in this APR. APR 2006 also details the latest on President Bush’s efforts to bring more competition to federal programs, saving billions of taxpayer dollars in the process. The “Federal Update” also includes the latest news on federal program performance, military postal privatization, and a major government reform bill. The “Local and State Update” section highlights two key projects in which Reason assisted local officials in developing plans to streamline government and save taxpayer dollars: the incorporation of Georgia’s first contract city (Sandy Springs) and the launch of a county-wide managed competition program in Hamilton County, Ohio. This issue also includes an expanded section on tax and expenditure limitations (TELs). Dr. Barry Poulson, distinguished scholar at Americans for Prosperity, offers an update about the progress that states and local governments have made toward constraining the growth of government by enacting TELs similar to Colorado’s Taxpayer Bill of Rights (TABOR). This year’s APR provides a comprehensive overview of domestic and international developments in air and surface transportation, including the significant growth in highway tolling and the increasing use of public-private partnerships for toll projects. The “Surface Transportation” section includes a profile of Reason’s groundbreaking Mobility Project, our long-term, nationwide effort to help stimulate urban economies by improving mobility and reducing congestion. Reason played a key role in the debate over California’s Proposition 82—the universal preschool initiative defeated at the polls in June—through an extensive research and public outreach program. The “Education” section includes a review of continuing state efforts to adopt universal preschool programs, as well as articles on school choice, the benefits of shared services, and child welfare privatization. For the first time, APR includes a section on the fast-moving arena of telecommunications policy, featuring articles on the deployment of municipal broadband services, network neutrality, and video franchise reform. Our “Emerging Issues” section includes articles on policy strategies to speed hurricane recovery, foreign management of domestic infrastructure, the government pension crisis, government offshoring, and free-market alternatives to occupational licensing. The protection of private property rights continues to be a hot button issue a year after the U.S. Supreme Court’s 2005 decision in Kelo vs. City of New London. This APR features an update on eminent domain reform in the states, as well as state-level efforts to replicate Oregon’s Measure 37, a voter-passed initiative designed to protect property owners from regulatory takings via land use regulation. Your comments on the 20th Annual Privatization Report are important to us. Please feel free to contact us with questions, suggestions, or for more information. For more privatization news, check out Privatization Watch (www.reason.org/pw.shtml), now in its 30th year of publication. For the most up-to-date information on the rapidly changing privatization world, please visit our Privatization Center (www.reason.org/privatization/) and our weblog, Out of Control (www.reason.org/outofcontrol/). Leonard C. Gilroy, Editor Annual Privatization Report 2006 Transforming Government Through Privatization Introduction ............................................................................................... 1 Privatization in Perspective .......................................................................3 Reflections from Privatization Pioneers ..................................................... 6 1. Rebuilding an Enterprise Society through Privatisation ........................... 7 by Margaret Thatcher 2. Reforming Government Through Competition ....................................... 10 by Governor Mitchell E. Daniels 3. Advancing Limited Government, Freedom, and Markets .........................14 by Governor Mark Sanford 4. Privatizing to Improve Government ...................................................... 16 by Stephen Goldsmith 5. Reflections on 30 Years of Promoting Privatization ................................ 21 by Robert W. Poole, Jr. 6. Privatization: Past, Present, Future ...................................................... 24 by E.S. Savas 7. Privatization: Are We Finally Turning the Corner? ...................................29 by Ronald Utt 8. “Q” Privatised? James Bond More Efficient? .......................................... 32 by John Blundell 9. The New Public-Private Landscape ........................................................ 35 by William D. Eggers 10. The New Privatization: Applying Old Lessons to New Problems ............ 39 by Roger D. Feldman 11. Privatization: Looking Backward, Looking Forward ............................... 42 by Lawrence L. Martin, Ph.D. 12. Cutting the Government in Half: Three Reforms ..................................
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