Propositions Addressing the Privatization of Public Leisure Services: Implications for Efficiency, Effectiveness, and Equity

Abstract

In North America, the direct provision of public services has traditionally been considered more effective in forwarding certain social purposes than the processes of individual exchange. Under this premise, the state is believed to actin the best interests of its citizens, whereas the market is believed to act according to profit without consideration for the public good. As a result, the state, not the market, has been relied upon most to deliver public leisure services. Since the 1970s, however, the traditional model of public service delivery has come under increased scrutiny from taxpayers. Citizens, politicians, and specialinterest groups have called for greater accountability and fiscal restraint on the part of the state. In response, many municipalities have chosen to "privatize" services with the intent to improve the efficiency of their service delivery.

Privatization and its implications for efficiency, effectiveness, and equity, however, have not been addressed empirically in North American leisure studies. As such, this paper reviews literature pertaining to the privatization of public services with the intent to develop propositions that suggest directions for future study. Much of the information originates from the discipline of public administration since little work in this area has been reported in the North American leisure journals. Twenty-five propositions are developed and discussed under three broad headings: ( 1) implications for efficiency, (2) implications for effectiveness, and (3) implications for equity. Each proposition is presented in an operational format that is conducive to empirical investigation.

Decidedly, the fundamental argument for privatizing public leisure services is that it increases efficiency. The author argues that privatization is more efficient than direct provision because it ( 1) reduces the cost of delivery, (2) introduces competition and consumer choice, ( 3) avoids the oversupply of services, ( 4) displaces inefficient personnel, and ( 5) stimulates greater measurement. The public sector is presumably unable to match the efficiency of the commercial and not-for-profit sectors because it is monopolistic, cumbersome, and lacks the incentive to be innovative.

As Goodale ( 1991) suggests, however, "efficiency tells us if we are doing things right: effectiveness tells us if we are doing the right things" (p. 236). In terms of effectiveness, the author argues that service quality will improve with privatization, but the ability of government to meet its social objectives will decline. Also, privatization is criticized for continuing to encourage passive consumerism.

Perhaps the most controversial aspect of privatization is its implications for equity. Indeed, Crompton and Lamb ( 1986) insist that "primary concern should be given to equity, then to effectiveness, and finally to efficiency" (p. 168). The author contends that privatization is inequitable if the fairness of allocation decisions is defined by equal opportunity or compensatory equity models. Also, the leisure needs of marginalized groups are not expected to be met sufficiently. Participants, though, are expected to remain indifferent about whether recreation services are privatized or not.