Privatization of Welfare Services: A Review of the Literature. Desire for System Change


Before PRWORA, a widespread belief existed that the old AFDC system and the agencies that administered it were fundamentally flawed, and geared more toward ensuring eligibility and compliance with rules than toward helping recipients work and become self-sufficient (Bane and Ellwood 1994; Walters 1997). The sense of frustration with the old welfare system seemed to increase interest in using private organizations to provide welfare services. Many states articulated the goal of "changing the culture of the welfare office," and contractors were seen as less entrenched in the old ways than public welfare agencies were (Diller 2000). One journalist commented that the effective replacement of AFDC with TANF would require "nothing less than the reinvention of human services delivery at the state level" (Walters 1997). Privatization was one way to accomplish this reinvention.

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