Week 5 - Discussion 1

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University Of Arizona *

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545

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Economics

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Nov 24, 2024

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1

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From the internet, find an example where a public entity has privatized traditional governmental functions. Send a summary of the privitization effort, along with your analysis of the merits or problems with this particular example of privitization. A form of privatization consist of private firms awarded the right to perform a specific service within a geographic area where the government has jurisdiction. The government regulates the prices that company charges the public for services rendered. For example, vehicle towing consists of the users charged a fee even when the service is produced internally. Residential Solid Waste Collection (RSWC) is a candidate of privatization because the necessary inputs to production are abundant in the economy (unskilled labor and specific capital). Also, the costs for private firms to enter or exit the RSWC market are relatively low. The propensity for private sector firms to enter the RSWC market is apparent from the results of the 2009 survey of privatization in America. The RSWC and other services are expected to remain among the most frequently privatized. Privatization is a major concern of public officials and employees, citizens and scholars, and each of these group interests is the privatization decisions. Public officials are concerned with the economic and political costs associated with privatization. Citizens are interested in the effect of privatization and factors that influence the decision to privatize. Kodrzycki, Yolanda. K. (2009). Privatization of local public services. Retrieved from https://www.bostonfed.org/economic/neer/neer2009/neer394c.pdf
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