Privatization in Practice: Case Studies of Contracting for TANF Case Management. Pragmatic and Political Factors


In some sites, pragmatic and political factors also played a role in the decision to privatize. In Delaware and San Diego County, for example, the need to add capacity for new services in response to welfare reform was one of several factors. In Delaware, the state wanted to provide more services but was constrained by the governors desire not to expand the state governments workforce. San Diego County wanted to provide services quickly to recipients transitioning into a new, time-limited welfare program but believed it could not increase its staff rapidly enough because of limits on the size of the county workforce.

The desire for a fundamental change in the provision of services was also a factor. Welfare reform changed the job of many welfare staff from primarily determining eligibility and benefit levels to much more intensive, work-focused assistance. One advantage of changing from public to private agencies is that the latter could hire staff with the necessary skills and mindset to provide more work-oriented case management. In Delaware, there was a view that existing staff lacked the skills necessary to provide the services. In both Delaware and Wisconsin, privatization with performance-based contracts was viewed as a way of promoting service provider "responsibility" that mirrored welfare reforms central philosophy of personal responsibility among recipients.

In many of the sites, another factor in the decision to privatize was their history of contracting out for human services. It seemed natural to expand this method when more employment services were needed after welfare reform. For example:

  • In Delaware, two of the four agencies responsible for welfare reform had considerable prior experience contracting out. The Department of Social Services had contracted out for vocational training and job search assistance under AFDC and the Department of Labor had contracted for training under JTPA.
  • The City of Minneapolis (in Hennepin County) had contracted out employment and training services to nonprofit agencies for over ten years prior to welfare reform, deliberately cultivating a community-based service network.
  • In Wisconsin, even prior to welfare reform, the state had contracted with the counties to provide AFDC, and private agencies had run the JOBS program.

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