As mayor of Indianapolis in the 1990s, Stephen Goldsmith pioneered the privatization and decentralization of city services. Now a Harvard professor of government, he and William Eggers, a senior fellow at the Manhattan Institute, have written Governing by Network (Brookings) to help other leaders enact similar reforms–and to avoid some common pitfalls. Assistant Editor Kerry Howley interviewed the authors last January.
Q: Where is federal privatization headed?
Eggers: Every year, more and more of the federal government relies on private firms and consultants to deliver goods. It dramatically increased under Bill Clinton, it's increasing under George Bush, and it will increase under the next president. In Iraq during the first Gulf War, there were 50 soldiers to every contractor. In the last war, it was one contractor to every 10 soldiers. They've become embedded in just about every aspect of warfare.
Q: Wasn't that part of what led to problems at Abu Ghraib?
Eggers: There weren't enough contract managers over there involved in this. There is really no doubt about that, for how large some of these contracts were and how many contractors there were.
But you need to look at what we have been able to accomplish. The technological capability that we showed during Operation Iraqi Freedom would never have been possible without this new model, because government didn't have the technology available or the know-how to implement it. Would we have been able to win the first part of the war so quickly without private firms? I think the answer is no. The gains in terms of logistics were really remarkable.
Goldsmith: You can see that the broad use of contractors has been a credible part of the strategy and still acknowledge that improvements could be made.
Q: Is there a privatization backlash?
Eggers: One reason we wrote the book is because we worry that without more attention to that, there will be a backlash.
Goldsmith: There's very rarely a backlash against traditional government programs–they tend to be more tolerated. But if you outsource badly, there is a lot of attention.
Q: What needs to change?
Eggers: I think we need to redefine what it means to be a public employee. The people who have skills in acquisition, contract management, and negotiation are not necessarily the most highly valued people in government.