Privatization in Practice: Case Studies of Contracting for TANF Case Management. The Rationale for Privatization


At the time the study sites were considering whether and how to privatize case management, their cash assistance programs were undergoing major changes in structure and goals as a result of welfare reform. In many cases, welfare reform itself acted as a catalyst for modifications in service delivery. In three study sites  Palm Beach County, Florida; Lower Rio Grande Valley, Texas; and Wisconsin  state welfare reform legislation explicitly allowed or even encouraged some privatization.

The level of government at which the decision to privatize was made varied by site. In Florida and Texas, the state legislatures required local workforce development boards to contract out operation of the one-stop career centers and the TANF services they provided. Similarly, Wisconsins state welfare reform legislation required that TANF services be contracted out to either private agencies or counties. In San Diego and Hennepin Counties, the decision to privatize was made by the county government. In Delaware, the decision was made by the four state agencies designated to administer welfare reform. Officials from these agencies reported that they received little or no pressure from the governor or state legislature to privatize. Although several factors played a role in each sites decision to privatize, they generally fell into two broad categories: a belief that private agencies can provide better services at lower cost, and pragmatic and political considerations.

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