Privatization of Welfare Services:
A Review of the Literature

Pamela Winston, Andrew Burwick,
Sheena McConnell, and Richard Roper

Submitted to:
Department of Health and Human Services
Office of the Assistant Secretary for Planning and Evaluation

Submitted by:
Mathematica Policy Research, Inc.

May 2002

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  1. Introduction
    1. Definition of Privatization
    2. Recent Interest in Privatization
      1. Desire for System Change
      2. Passage of PRWORA
      3. Declining Popular Confidence in Government's Ability to Provide Effective Services
      4. Growth in Performance-Based Management Techniques
  2. The Current State of Social Service Privatization
    1. Survey Findings on the Extent of Social Service Privatization
    2. Types of Services Privatized
      1. Department of Labor Employment Services
      2. Child Welfare
      3. Child Support Enforcement
      4. TANF Services
    3. Types of Nongovernmental Organizations That Provide Welfare Services
      1. For-Profit Organizations
      2. Large Nonprofit Organizations
      3. Community-Based Nonprofit Organizations
  3. The Decision to Privatize
    1. Rationale for Privatization
      1. Cost Savings
      2. Improved Quality
      3. Need for Skilled Staff
      4. Flexibility
      5. Political Support
    2. Models of What and How to Privatize
      1. The Economist Perspective
      2. The Public Administration and Management Perspective
      3. The Political/Legal Perspective
  4. Challenges Faced in Privatizing Social Services
    1. Guaranteeing Competition
    2. Developing Effective Rfps and Contracts
    3. Monitoring Contractor Performance
    4. Addressing Political Opposition
    5. Involving Community-based Organizations
    6. Avoiding “Brain Drain”
    7. Protecting the Integrity of the Procurement Process
  5. Research Needs Met by MPR/ASPE Case Studies


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Last updated: 06/06/02