Public-Private Dichotomy

Using the public-private dichotomy to describe social policies can be misleading.

Characterizing any dichotomy are two mutually exclusive parts that together comprise the whole. A public-private dichotomy fits a social policy system if its components are clearly public or private, but not both. Together, public and private exhaust all kinds of social policies. If any policies fall outside this either/or categorization, then it is a false dichotomy, or a mistake to use the dichotomy label.

The importance of social policies rests in their affecting welfare through provision and regulation. Social policies often provide such services as education, health care, and psychological counseling. Social policies may also provide income or in-kind benefits, such as food stamps, subsidized housing, or school vouchers. Social policies may regulate human behavior, particularly if enacted as law to regulate food quality, require school attendance, or mandate medical testing.

Conceptualization of public-private qualities of social policies considers five key characteristics: accountability, management, stimulus, eligibility, and who pays. Public implies democratic accountability. Public social policies are established, managed, modified, and sometimes eliminated by government officials who are either elected or accountable to elected government officials. Private does not mean a lack of accountability, but that another entity, perhaps the individual alone, is responsible for the program. For example, an individual can decide to establish a savings account for eventual retirement, how to invest the funds, and eventually when and how to withdraw the funds.

A key component distinguishing public and private programs is who or what manages the social policy program. Government officials or a government institution manage a public program, such as the federal government administering Supplemental Security Income, the Social Security public program that provides a pension to individuals who have low incomes. Private entities manage a private program; for example, for purposes of saving for retirement, an investment company forms a fiduciary relationship through contract when managing an investor's savings.

Another key component for characterizing a social policy program as public or private is the program's stimulus. Many public programs obligate an individual to participate. The Social Security program mandates that nearly all paid workers contribute to the Social Security program. In contrast, an individual is not required to place his or her earnings in a private savings account.

Perhaps the most visible components for characterizing a social policy program as public or private are eligibility and who pays. Typically, we think everyone [Page 735]is eligible to enroll in a public social program or benefit from a public social service. A clear example is public elementary education. All children in the United States are entitled to a free and appropriate public education. In contrast, private schools establish procedures to decide on admission of a child, including application fees, admission tests, and interviews. The private school controls eligibility and can decline to admit an individual.

The last key component is who pays. Medicaid is a U.S. public health insurance program that is financed by federal and state government revenues. An individual who self-pays for private health care relies on his or her own funds and health and financial acumen to protect his or her well-being as the sole payer.

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