Answer: Note that in Article 13. “How Efficient Government Reform Can Save More Tax Dollars Than Privatization” I stated that you could save more tax dollars by government reforming itself than by privatization. Profits gained by the private company are lost and are not available to the state treasury. Another problem is that a private company may not implement the kind of reforms that bring continuous change and increased productivity that you want. Still another consideration is would the employees be better off under privatization. Would there be better job satisfaction health care and retirement benefits. An organization may be able to retain much of these benefits by self-reform. Certainly Privatization can work but it costs more to the state than if the state would make the changes itself and the company’s profits may come from reduced employee benefits.

The following is an alternative solution for extreme cases where a government bureaucracy with a government employee union is so powerful that all attempts to restructure it have failed. In this case I would suggest that a private consulting firm take over the management of the agency temporally and implement changes instead of permanent privatization. Private management consulting firms are very expensive and disrupt employee management relations to the point that micromanagement of day today activities in the agency may have to be implemented just to get the work done. This is not an ideal solution because it doesn’t get you where you want to go increased employee involvement continuous improvement and increased productivity. But if there is no other way the benefits of this approach may still be more than the current inefficient situation.