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BIG GOVERNMENT BY ANY OTHER NAME

July 21, 2017

The term "Public-Private Partnership" (or its catchy acronym "P3") is very much in vogue in political circles.  While the term may be relatively new, the concept is nothing new.  It is just a fancy way of refering to government outsourcing.   The conversation about public-private partnerships (or outsourcing) is usually accompanied by claims that when government functions are outsourced to the private sector, government shrinks. But that depends on what you mean by the "size of the government".

 

When we speak about the size of the government, the only real metric is how much money the government collects and spends. So, if Coast Guard staff design a high tech radio at a cost of $10Million, the government has spent $10Million.  That doesn't change if the Coast Guard hires Lockheed to design the radio for $10Million.  The government has not shrunk from a fiscal perspective - which is the metric that counts.

 

The next question is whether the private sector can do it better.  In some cases yes, in some cases no. The Coast Guard really did hire Lockheed to design and  build a radio at a cost of $10Million.  Said radio, it turned out, was not waterproof, which made it useless to the Coast Guard. 

 

The reality is that initiatives need to be managed and executed well.  Because in the end, a $10Million project is $10Million in government spending. Whether the government executed the project or a private company did.  Period.  

 

That said, in this post I describe a real public-private partnership.

 

 

 

 

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