‘Privatization Primer’ Not Ready for Prime Time

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

Contact: Teri Battaglieri, (517) 203-2940; (email)
Clive Belfield, (917) 821-9219; (email)

EAST LANSING, Mich. (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 according to a new review of the document.

Issued by the Mackinac Center, the report is entitled, “A School Privatization Primer for Michigan School Officials, Media, and Residents.” It was reviewed for the Think Twice 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 credits 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.

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 the complete review by Clive Belfield as well as a link to the Mackinac Center report at:

About the Think Tank Review Project
The Think Twice project provides the public, policy makers and the press with timely, academically sound reviews of selected think tank publications. It is a collaboration of the Education Policy Studies Laboratory at Arizona State University and the Education and the Public Interest Center at the University of Colorado at Boulder and is funded by the Great Lakes Center for Education Research and Practice.

The mission of the Great Lakes Center is to improve public education for all students in the Great Lakes region through the support and dissemination of high quality, academically sound research on education policy and practices.

Visit the Great Lakes Center website at: