Chapter V:
Research Needs Met by MPR/ASPE Case Studies
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As state and local agencies increasingly contract out services traditionally
provided by the public sector, issues arise concerning what should be privatized
and how to do it most effectively. Research on the privatization of welfare
services is still in its infancy. However, ongoing research is important,
especially given the recent, rapid changes in the welfare system and the
increasing prevalence of privatization. Our review of the literature identified
the need for three broad types of research in the privatization of welfare
services that can be met by the six MPR/ASPE case
studies.(1)
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Information on the Relative Quality and Cost Effectiveness of Privatized
Welfare Services. No careful study has been conducted on the quality
or cost effectiveness of welfare privatization. While the case studies will
not be able to quantify the quality or cost effectiveness, we will report
the perceptions of TANF agency staff and other stakeholders on the success
of privatization.
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Information on How Best to Implement Privatization. Research
shows that the effectiveness of privatization depends critically on the nature
of the market and the extent of competition, on the level of political and
operational support, and the effectiveness of the design of contracts and
of the accountability processes. Information is needed on how welfare agencies
should plan and implement the privatization process. By describing the
experiences and lessons learned of six TANF agencies that have privatized
case-management services, the six case studies will address this need.
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More Information on the Privatization of Case Management.
Most of the research has focused on the privatization of TANF employment
and support services, and little has been conducted on privatization of case
management, mainly because it is rarer and has occurred more recently. However,
the issues surrounding privatization of case-management services might differ
from those surrounding the privatization of other services. For example,
it might be more difficult to define appropriate contract goals or to monitor
the quality of case-management services. Contracting out broad case management
requires a specialized set of performance incentives. By focusing on TANF
case management, the case studies will address this need.
1. A need also exists to develop a national picture
of the extent of privatization of TANF services. A forthcoming GAO report
will address this need.
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