A good service delivers what a consumer needs and wishes. On that criterion many services that a government claims «serve the public» actually serve the government machine. They are provided according to government (bureaucratic) wishes, not those of the consumers.
Example: A policeman is not automatically, or on reflection, ready to do what an individual requires and so … anyone who wants to specify personal security needs has to go to a private firm for the service.
Private enterprises live or die by the quality and cost of their services. Governments are intrinsically capable of providing appalling services at exorbitant cost. It can get worse: government also has the power to specify that something is needed, regardless of evidence or practicality.
Because government is inherently weak or even awful at running businesses, services that can be run as a business should, in general, be left to the private sector.
Historically, many services have started under Government control and moved to the private sector. Governments have, to meet community needs, provided services that would otherwise not be provided by individual enterprise for various reasons (whose justification can be always argued) such as:
If the service becomes established, profitable (i.e. desired by a public prepared to pay) and uncontroversial, then it can be delivered:
Government (politicians) can exert influence in a wide variety of ways.
But there is only one way to get strongly managed high quality services. You must determine the organization and territory that is required by the nature of the service. This is not arcane theory but simple common sense. No business would think of operating in any other way. More.
Factors that should be considered include:
Originally posted: August-2009; Last updated: 15-Nov-2010