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Privatization
Privatization has been the subject of ongoing public policy debates for decades. In a broad sense, privatization involves transferring the production and delivery of a wide range of services from the government to the private sector and/or contracting with private companies to handle public services (e.g., solid waste collection, fire fighting, and the management of jails and prisons). Proponents of privatization favor issues of efficiency and accountability, whereas critics of privatization favor issues of social justice and equity. The theoretical support for privatization is grounded in (a) market theory, (b) public choice theory, and (c) property rights theory. Key tenets of each theory are as follows:
Market theory speaks to the virtues of competition, efficiency, and consumers exercising utility preferences in the private markets and the lack of such market forces in public monopolies. Public choice theory explains that government inefficiency is the result of incentive structures of public agencies that encourage public managers to build empires (e.g., power, budgets, and staffing) out of self-interest over societal interests. Property rights theory states that property will be cared for in proportion to individual gain from tending it; hence, private ownership increases ownership and efficiency, whereas public ownership decreases ownership and increases inefficiency.
Business Sector Influence
In 1983, the administration of President Ronald Reagan published a document titled A Nation at Risk: The Imperative for Educational Reform, which stated that global competitors had replaced the preeminence of the United States in all sectors and that educational foundations had been eroded by mediocrity. Accordingly, the solution lay in educational reform. Business and industrial groups demanded a return to teaching traditional academic subjects, shoring up the quality and quantity of science and math courses, and holding teachers accountable. The accountability movement had begun.
In 2004, Kathy Emery and Susan Ohanian chronicled the vetting process between the Business Roundtable (BRT) and the National Governor's Association over the past 25 years, revealing an undeniable alignment of educational policy with economic development. In the end, the No Child Left Behind Act (NCLB) of 2001 is as much Democratic President Bill Clinton's legacy as Republican President George W. Bush's.
Privatization of K–16 Education
At the K–12 level, privatization has involved to a lesser extent educational services and to a greater extent noneducational services. With noneducational services, privatization or contracting for transportation, food, and maintenance of facilities has been commonplace. As noted by Katrina Buckley in 2005, a new phenomenon known as educational management organizations (EMOs) have emerged, which offer services (predominately to charter schools) that range from bookkeeping to report writing to managing every aspect of a school's operations.
To a much lesser extent, privatization is associated with charter schools; however, charter schools are nonsectarian public schools that operate independently of many local and state regulations. Charter schools have burgeoned, and their numbers are expected to increase with school districts failing to meet Adequate Yearly Progress (AYP). As of 2005, the Center for Education Reform estimated that there are 37 states with charters (excluding Puerto Rico), 2,695 schools in operation (15% increase from last school year), with nearly 685,000 students enrolled.
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