Education Policy Research Unit (EPRU) at ASU
Education and the Public Interest Center (EPIC) at CU-Boulder

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'PRIVATIZATION PRIMER' NOT READY FOR PRIME TIME

Review finds Mackinac Center report offers little evidence for privatization, ignores arguments against the practice

Contact: Clive Belfield, (917) 821-9219; (email) clive.belfield@qc.cuny.edu
Kevin Welner, (303) 492-8370; (email) kevin.welner@gmail.com

TEMPE, Ariz. and BOULDER, Colo. (Feb. 19, 2008) - A report last year billed as a guide for Michigan schools and others on privatizing school services offers little evidence to support its premise that privatizing those services saves money or is otherwise beneficial, a new review of the document finds.

The report, "A School Privatization Primer for Michigan School Officials, Media, and Residents," was written by Michael D. LeFaive and published by the Mackinac Center for Public Policy. It was reviewed for the Think Tank Review Project by Professor Clive Belfield, an economist at Queens College, City University of New York.

The "Privatization Primer" argues for contracting out schools' food, transportation, and custodial services, and offers guidelines for carrying out that task. Belfield praises the report for providing credible surveys of the current breadth of contracting-out practices and describes "practical steps for issuing and monitoring contracts" that might be helpful to districts who wish to pursue the strategy. But, Belfield concludes, its usefulness stops there.

The report, he says, "does not offer a balanced framework for assessing the costs and benefits of contracting out." It ignores transaction costs, reports only on officials' perception of the advantages of contracting out while omitting any discussion of disadvantages, and fails to acknowledge that research evidence on the practice in education "is far from conclusive." In fact, Belfield finds little evidence to support the underlying assumption that privatizing these services does save districts money.

In support of privatization, the Primer largely relies on data from a survey of Michigan school district officials who contracted out service, 75% of whom reported cost savings from doing so, and who reported they were "highly satisfied" with the outcome.

Belfield, however, points out that "these self reports do not constitute adequate evidence either of benefits or of satisfaction." For one thing, he notes, the findings were not compared with the satisfaction levels of officials in districts that did not contract out the services. In addition, "no evidence on the dollar amounts of any such cost savings is reported."

Throughout the document, Belfield notes, the author fails to consider any evidence that might contradict his assumptions about the benefits of contracting out. "For example, no investigation is made either of the number of terminated contracts or of the failed attempts to hire a contractor at lower cost than existing public realm provision of these services," Belfield writes. "Similarly, no mention is made of the likelihood that private contractors will 'cherry-pick' the easiest services and leave the public enterprise to provide the more expensive ones."

"The report may be successful in persuading districts to consider contracting out," Belfield says, "but this change may not be financially or otherwise appropriate for any given district."

Find Clive Belfield's review on the web at:
http://epsl.asu.edu/epru/ttreviews/EPSL-0802-251-EPRU.pdf

About the Think Tank Review Project

The Think Tank Review Project (http://thinktankreview.org), a collaborative project of the ASU Education Policy Research Unit (EPRU) and CU-Boulder's Education and the Public Interest Center (EPIC), provides the public, policy makers, and the press with timely, academically sound reviews of selected think tank publications. The project is made possible by funding from the Great Lakes Center for Education Research and Practice.

Kevin Welner, the project co-director, explains that the project is needed because, "despite their garnering of media attention and their influence with many policy makers, reports released by private think tanks vary tremendously in their quality. Many think tank reports are little more than ideological argumentation dressed up as research. Many others include flaws that would likely have been identified and addressed through the peer review process. We believe that the media, policy makers, and the public will greatly benefit from having qualified social scientists provide reviews of these documents in a timely fashion." He adds, "we don't consider our reviews to be the final word, nor is our goal to stop think tanks' contributions to a public dialogue. That dialogue is, in fact, what we value the most. The best ideas come about through rigorous critique and debate."

CONTACT:
Clive Belfield
Asst. Professor, Asst. Chair - BBA Program, Chair - Summer Program
Economics Department,
Queens College, CUNY
(917) 821-9219

Kevin Welner, Professor and Director
Education and the Public Interest Center
University of Colorado at Boulder
(303) 492-8370
kevin.welner@gmail.com

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The Education Policy Research Unit (EPRU) conducts original research, provides independent analyses of research and policy documents, and facilitates educational innovation. EPRU facilitates the work of leading academic experts in a variety of disciplines to help inform the public debate about education policy issues.

Visit the EPRU website at http://educationanalysis.org

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The Education and the Public Interest Center (EPIC) at the University of Colorado, Boulder seeks to contribute information, analysis, and insight to further democratic deliberation regarding educational policy formation and implementation.

Visit the EPIC website at http://education.colorado.edu/epic

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