Archive for the ‘privatization’ Category

Warehoused and Forgotten: Immigrants Trapped in Our Shadow Private Prison System

June 24, 2014 Comments off

Warehoused and Forgotten: Immigrants Trapped in Our Shadow Private Prison System
Source: American Civil Liberties Union

In rural Texas, 3,000 men are locked inside a “tent city,” sleeping in bunk beds spaced only a few feet apart. The tents are crawling with insects and the smell of broken, overflowing toilets. This is Willacy County Correctional Center: a physical symbol of everything that is wrong with enriching the private prison industry and criminalizing immigration.

More than 25,000 low-security non-U.S. citizens languish at thirteen private prisons like Willacy under Criminal Alien Requirement (CAR) contracts. For years, these for-profit prisons have been able to operate in the shadows, effectively free from public scrutiny. That ends now.

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CRS — Airport Privatization: Issues and Options for Congress

May 19, 2014 Comments off

Airport Privatization: Issues and Options for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

In 1996, Congress established the Airport Privatization Pilot Program (APPP; 49 U.S.C. §47134; Section 149 of the Federal Aviation Reauthorization Act of 1996, P.L. 104-264) to increase access to sources of private capital for airport development and to make airports more efficient, competitive, and financially viable. Participation in the program has been very limited, in good part because major stakeholders have different, if not contradictory, objectives and interests.

Only two U.S. commercial service airports have completed the privatization process established under the APPP. One of those, Stewart International Airport in New York State, subsequently reverted to public ownership. Luis Muñoz Marín International Airport in San Juan, Puerto Rico, is now the only airport with a private operator under the provisions of the APPP.

Increasing interest in airport privatization is likely to require a number of significant policy changes, including the following:
• Making privatization more attractive to public-sector owners by facilitating the use of privatization revenue for non-airport purposes.
• Providing similar tax treatment to bonds issued by public-sector and privatesector airport operators, as public-sector operators now have access to less costly long-term finance than private operators.
• Easing requirements for private owners to comply with assurances previously made by public-sector owners to obtain federal Airport Improvement Program (AIP) grants.
• Accelerating the application and approval procedures for the APPP.

Annual Privatization Report 2014

May 9, 2014 Comments off

Annual Privatization Report 2014
Reason Foundation

Now in its 27th year of publication, Reason Foundation’s Annual Privatization Report is the world’s longest running and most comprehensive report on privatization news, developments and trends.

Annual Privatization Report 2014 details the latest on privatization and government reform initiatives at all levels of government.

Offshore Outsourcing of Administrative Functions by State Medicaid Agencies

April 18, 2014 Comments off

Offshore Outsourcing of Administrative Functions by State Medicaid Agencies
Source: U.S. Department of Health and Human Services, Office of Inspector General

Outsourcing occurs when State Medicaid agencies enter into agreements with contractors to perform administrative functions. Outsourcing can occur inside the United States (domestic outsourcing) or outside (offshore outsourcing) and can be direct (when a Medicaid agency contracts with an offshore contractor) or indirect (when a Medicaid agency’s contractor subcontracts to an offshore contractor). There are no Federal regulations that prohibit the offshore outsourcing of Medicaid administrative functions. However, the Health Insurance Portability and Accountability Act (HIPAA) requires covered entities to have business associate agreements (BAAs) to protect personal health information (PHI).

We conducted a survey of 56 Medicaid agencies, including those of the District of Columbia and the U.S. territories. We asked Medicaid agencies (1) whether they had any policies, Executive Orders, State laws, or contract requirements (collectively, “requirements”) addressing the outsourcing of administrative functions offshore and (2) whether they directly or indirectly outsourced administrative functions offshore. For Medicaid agencies with outsourcing requirements, we asked whether these requirements address PHI and whether the Medicaid agencies monitor contractors’ compliance with the requirements. We reviewed the Medicaid agencies’ requirements and BAAs. For the Medicaid agencies that outsource offshore, we asked what types of administrative functions are outsourced offshore.

Only 15 of 56 Medicaid agencies have some form of State-specific requirement that addresses the outsourcing of administrative functions offshore. The remaining 41 Medicaid agencies reported no offshore outsourcing requirements and do not outsource administrative functions offshore. Among the 15 Medicaid agencies with requirements, 4 Medicaid agencies prohibit the outsourcing of administrative functions offshore and 11 Medicaid agencies allow it. The 11 Medicaid agencies that allow offshore outsourcing of administrative functions each maintain BAAs with contractors, which is a requirement under HIPAA. Among other things, BAAs are intended to safeguard PHI. These 11 Medicaid agencies do not have additional State requirements that specifically address safeguarding PHI. Seven of the eleven Medicaid agencies reported outsourcing offshore through subcontractors, but none reported sending PHI offshore. If Medicaid agencies engage in offshore outsourcing of administrative functions that involve PHI, it could present potential vulnerabilities. For example, Medicaid agencies or domestic contractors that send PHI offshore may have limited means of enforcing provisions of BAAs that are intended to safeguard PHI. Although some countries may have privacy protections greater than those in the United States, other countries may have limited or no privacy protections.

State of Global Partnerships

April 2, 2014 Comments off

State of Global Partnerships
Source: U.S. Department of State

The Secretary’s Office of Global Partnerships leveraged approximately $829 million in public and private resources for diplomacy and development since 2009, and worked with over 1,600 partners from around the world.

Globally, countless partnerships have been launched. In this report, we’ve selected a few standout partnerships to illustrate the impact these efforts have had, or will have, in the future.

Bureaucratic Interests and the Outsourcing of Security: The Privatization of Diplomatic Protection in the United States and the United Kingdom

April 2, 2014 Comments off

Bureaucratic Interests and the Outsourcing of Security: The Privatization of Diplomatic Protection in the United States and the United Kingdom (working paper version; PDF)
Source: Armed Forces & Society

In spite of its sensitivity, diplomatic protection has received very sporadic scholarly attention. This article provides a comparative analysis of US and UK diplomatic security policies, focusing on the increasing use of private military and security companies (PMSCs) for the protection of foreign service and development agencies’ personnel. The existing theoretical explanations of the privatization of security tasks cannot explain why countries displaying similar material incentives and similar political and market cultures have outsourced diplomatic protection to different degrees, nor can they account for variance in the use of PMSCs by different agencies within the same country. Our analysis highlights the importance of investigating organizations’ interests in providing a more accurate explanation of the varying propensity to outsource armed protection. In both the United States and the United Kingdom, the outsourcing of diplomatic security was a resultant of foreign policy bureaucracies and military organizations’ preferences.

New From the GAO

March 19, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Military Housing: Information on the Privatization of Unaccompanied Personnel Housing. GAO-14-313, March 18.
Highlights –

2. Nuclear Command, Control, and Communications: Review of DOD’s Current Modernization Efforts. GAO-14-414R, March 18.

New From the GAO

January 22, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Army Corps of Engineers: Cost Increases in Flood Control Projects and Improving Communication with Nonfederal Sponsors. GAO-14-35, December 20.
Highlights –

2. Medicaid Prescription Drugs: CMS Should Implement Revised Federal Upper Limits and Monitor Their Relationship to Retail Pharmacy Acquisition Costs. GAO-14-68, December 19.
Highlights –

3. Flood Insurance: Strategies for Increasing Private Sector Involvement. GAO-14-127, January 22.
Highlights –

4. Medicare Advantage: 2011 Profits Similar to Projections for Most Plans, but Higher for Plans with Specific Eligibility Requirements. GAO-14-148, December 19.
Highlights –

5. Medicare Advantage: Special Needs Plans Were More Profitable, on Average, than Plans Available to All Beneficiaries in 2011. GAO-14-210R, December 19.

New From the GAO

January 14, 2014 Comments off

New GAO Report and Testimony
Source: Government Accountability Office


1. VA Vocational Rehabilitation and Employment: Further Performance and Workload Management Improvements Are Needed. GAO-14-61, January 14.
Highlights –

2. Space Acquisitions: Assessment of Overhead Persistent Infrared Technology Report. GAO-14-287R, January 13.


1. Screening Partnership Program: TSA Issued Application Guidance and Developed a Mechanism to Monitor Private versus Federal Screener Performance, by Jennifer Grover, acting director, homeland security and justice, before the Subcommittee on Government Operations, House Committee on Oversight and Government Reform. GAO-14-269T, January 14.
Highlights –

Privatizing the Transportation Security Administration

December 5, 2013 Comments off

Privatizing the Transportation Security Administration
Source: Cato Institute

After the terrorist attacks in 2001, the federal government moved quickly to increase spending on aviation security and take control of passenger and baggage screening at U.S. airports. Congress created the Transportation Security Administration (TSA) in 2001, and then transferred the agency to the new Department of Homeland Security (DHS) in 2002.

TSA’s main activity is operating security screening at more than 450 commercial airports across the nation. The agency also runs the Federal Air Marshal Service (FAMS), analyzes intelligence data, and oversees the security of rail, transit, highways, and pipelines. TSA has 62,000 employees and an annual budget in 2013 of $7.9 billion.

After more than a decade of experience, it is clear that the creation of TSA and the federal takeover of airport screening was a mistake. Auditors have found that TSA’s screening performance has been no better, and possibly worse, than private screening. And TSA has become known for mismanagement, dubious investments, and security failures. Former TSA chief Kip Hawley noted last year that the agency is “hopelessly bureaucratic.” And recent congressional reports have blasted TSA for “costly, counter intuitive, and poorly executed” plans and for having an “enormous, inflexible and distracted bureaucracy.”

We would be better off without a monolithic federal agency that controls all major aspects of aviation security. Most airports in Europe and Canada use private companies for their passenger and baggage screening. That practice creates a more efficient and innovative security structure, and it allows governments to focus on gathering intelligence and conducting analysis rather than on trying to manage a large workforce.

Please Deposit All of Your Money: Kickbacks, Rates, and Hidden Fees in the Jail Phone Industry

November 27, 2013 Comments off

Please Deposit All of Your Money: Kickbacks, Rates, and Hidden Fees in the Jail Phone Industry (PDF)
Source: Prison Policy Initiative

At a time when the cost of a phone call is approaching zero, one population is forced to pay astronomical sums to stay in touch: the families of incarcerated people. For a child to speak with her incarcerated parent, a family member or friend is forced to pay almost $1 per minute, plus a long list of other fees that easily double the total cost of the call. Faced with phone bills that can total hundreds of dollars, many families have to choose between paying for calls and paying for basic living expenses.

This report finds that fees have an enormous impact on prison phone bills, making up 38% of the $1 billion annual price of calling home. This report details the fees that prison phone companies charge for “services” such as:
• accepting customers’ money (deposit fees of up to $10/deposit)
• holding on to customers’ money (monthly account fees as high as $12)
• closing customers’ accounts (refund fees of up to $10)

See also: Return to Sender: Postcard-only Mail Policies in Jail (PDF)

Locked up and Shipped Away: Interstate Prisoner Transfers & the Private Prison Industry

November 27, 2013 Comments off

Locked up and Shipped Away: Interstate Prisoner Transfers & the Private Prison Industry
Source: Grassroots Leadership

Major Findings

  • Interstate transfer of prisoners, or the practice of transferring incarcerated people to out-of-state prisons, is detrimental criminal justice policy that hurts families.
  • The practice impedes prisoner rehabilitation by diminishing prisoners’ ties to family and community, compromising rather than enhancing the public good.
  • Interstate transfers of prisoners to private for-profit prisons serve the interests of an industry that views prisoners as commodities and perpetuate our nation’s mass incarceration crisis.
  • Today there are more than 10,500 state prisoners incarcerated in private for-profit prisons outside of their home states.
  • Currently, four states – California, Vermont, Idaho, and Hawai’i – house prisoners in out-of-state private prisons, while West Virginia is moving forward with a plan that could move up to 400 prisoners to private out-of-state prisons.[1]
  • With little public scrutiny, state officials have pointed to overcrowding as justification for sending incarcerated people to out-of-state prisons, rather than prioritizing decarceration and sustainable alternatives to incarceration to address prison overcrowding.
  • The lack of state laws regulating interstate transfers of prisoners has allowed state officials to send incarcerated people to out-of-state private prisons en masse without their consent.
  • Currently, prisoners in out-of-state private facilities are held approximately 450 miles to nearly 3,000 miles from their home states.
  • Using the most recent available contracts and government reports, we estimate that states will collectively spend hundreds of millions of dollars this year incarcerating state prisoners in private prisons outside of their home states.

UC Berkeley report raises alarm about falling wages, outsourcing at U.S. airports

November 18, 2013 Comments off

UC Berkeley report raises alarm about falling wages, outsourcing at U.S. airports
Source: UC Berkeley Center for Labor Research

The outsourcing of airport jobs that once sustained middle-class careers has left many airport workers in jobs characterized by insecurity and low wages, according to a new UC Berkeley study released Monday, Nov. 4. According to the study, this trend poses problems for workers, the communities surrounding airports and the flying public.

The report, “Course Correction,” comes as voters in SeaTac, Wash., a city adjacent to the Seattle-Tacoma International Airport, consider a local ordinance that would set a $15-per-hour minimum wage for many airport and airport-related workers, and do so just as the holiday season and air travel begin to pick up. Agencies also are considering similar measures at other airports.

According to the report, airport and airport-related workers saw real hourly wages fall by an average of 15 percent from 2002 to 2012. The report also notes that, while the total number of workers in air transport-related industries has declined since 2001, the share of outsourced workers grew from 19 percent to 26 percent by 2011.

Uncovering the Drivers of Utility Performance : Lessons from Latin America and the Caribbean on the Role of the Private Sector, Regulation, and Governance in the Power, Water, and Telecommunication Sectors

September 26, 2013 Comments off

Uncovering the Drivers of Utility Performance : Lessons from Latin America and the Caribbean on the Role of the Private Sector, Regulation, and Governance in the Power, Water, and Telecommunication Sectors
Source: World Bank

This book conducts a micro-level analysis of various determinants of infrastructure sector performance that affect development. This book focuses on the distribution segment of three basic infrastructure services: electricity, water and sanitation, and fixed telecommunications. This books aims to answer four main sets of questions: what are the main performance trends in the region, and how heterogeneous are they?; how does the performance of state-owned and private utilities differ?; how does the institutional design of regulatory agencies affect sector performance?; and what management mechanisms create incentives for improved performance?. This book begins by describing the main elements that characterize sector performance, defined as the delivery of reliable, affordable service that complies with certain quality standards. It focuses on the relationship between sector performance and the following determinants: private sector participation, regulatory agencies, and corporate governance. It also examines related aspects, such as contract design, market structure, and, for telecommunications, market competition. This book first explains the dynamics of utility performance and the interactions between key internal variables and utility performance in each sector. The book is organized as follows: chapter one is introduction. Chapter two outlines changes in the electricity distribution, water and sanitation, and fixed telecommunications sectors in the Latin America and the Caribbean (LAC) region over the past 15 years. This chapter tells multiple stories of the substantial improvement in these sectors and fills in knowledge gaps by benchmarking utility performance at the regional, country, and utility levels. Chapter three synthesizes the impact private sector participation has had on electricity distribution, water and sewerage, and fixed-line telecommunications. This chapter also identifies whether private sector participation characteristics such as the sale method; investor nationality; and award criterion affect performance. Chapter four explores the institutional design of regulatory agencies and the link between regulatory governance and sector performance. Chapter five assesses the governance of state-owned enterprises (SOEs) in infrastructure, based on survey results from 45 SOEs in the water and electricity distribution sector of LAC. Chapters six examines other potential determinants for sector performance, including corruption, cost recovery, contract arrangements, and competition. Chapter seven summarizes the book s main results and describes the array of possibilities for moving forward.

Study Reveals Large, Untapped Potential for Water and Sanitation Services for the World’s Poor

September 6, 2013 Comments off

Study Reveals Large, Untapped Potential for Water and Sanitation Services for the World’s Poor
Source: World Bank

Many of the poorest, un-served people in developing countries, for whom public water and sanitation services are out of reach, could increasingly rely on service provision through the domestic private sector. A new report today released by the World Bank’s Water and Sanitation Program (WSP) and the International Finance Corporation (IFC) finds that this will not only improve their livelihoods but is also an enormous market potential which waits to be tapped.

Today, 2.5 billion people lack access to sanitation and at least 780 million people lack access to safe drinking water. Global estimates of economic losses from the lack of access to water and sanitation are estimated at US$260 billion every year.

One of the most striking findings of Tapping the Markets: Opportunities for Domestic Investments in Water and Sanitation for the Poor, is the enormous market potential. Focusing only on Bangladesh, Benin, and Cambodia, about 20 million people are projected to obtain their water from rural piped water schemes by 2025. That is 10 times the current number, a market worth at least US$90 million a year. On the sanitation side, there is a potential US$700 million Bottom of the Pyramid market in Bangladesh, Indonesia, Peru, and Tanzania. The current total market for improved on-site sanitation services in these four countries is estimated to be worth US$2.6 billion.

The results of the study offer new solutions to prevent the thousands of daily child deaths and hundreds of billions of dollars in annual economic losses caused by lack of access to water and toilets. It takes a hard look at the challenges faced in tapping the business opportunities in developing countries by private firms willing to make the commitment to reaching the poorest people.

Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China

August 28, 2013 Comments off

Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China
Source: International Monetary Fund

This paper uses the Shapley Value decomposition technique to assess the factors behind the rise of inequality in China. It finds that, in many ways, inequality may have been an inevitable by-product of China’s investment and export-led growth model. Between Chinese households, we find that the most important factors explaining income inequality are location, education, access to health insurance, and labor market variables, including the sector of employment and enterprise size. Across China’s provinces, divergences in per capita incomes are driven by the relative level of capital-intensity, public spending, financial access, privatization, and urbanization. In addition, excess liquidity may have exacerbated inequality in the last decade, by driving up property prices and the wealth gap. Based on these results, policies that could help broaden the benefits of growth in China include maintaining prudent monetary and credit policies, a more progressive fiscal tax and expenditure system, higher public spending on health and education, deregulation and reforms to increase competition, measures to raise labor incomes and assist vulnerable workers, and better access to finance for both households and SMEs, including in rural areas. Not surprisingly, given the argued nexus between China’s growth strategy and inequality, many of these reforms are the same ones that would help rebalance its economy toward consumption and household incomes.

Comparative Performance of Private and Public Healthcare Systems in Low- and Middle-Income Countries: A Systematic Review

June 20, 2012 Comments off

Comparative Performance of Private and Public Healthcare Systems in Low- and Middle-Income Countries: A Systematic Review

Source: PLoS Medicine


Private sector healthcare delivery in low- and middle-income countries is sometimes argued to be more efficient, accountable, and sustainable than public sector delivery. Conversely, the public sector is often regarded as providing more equitable and evidence-based care. We performed a systematic review of research studies investigating the performance of private and public sector delivery in low- and middle-income countries.

Methods and Findings

Peer-reviewed studies including case studies, meta-analyses, reviews, and case-control analyses, as well as reports published by non-governmental organizations and international agencies, were systematically collected through large database searches, filtered through methodological inclusion criteria, and organized into six World Health Organization health system themes: accessibility and responsiveness; quality; outcomes; accountability, transparency, and regulation; fairness and equity; and efficiency. Of 1,178 potentially relevant unique citations, data were obtained from 102 articles describing studies conducted in low- and middle-income countries. Comparative cohort and cross-sectional studies suggested that providers in the private sector more frequently violated medical standards of practice and had poorer patient outcomes, but had greater reported timeliness and hospitality to patients. Reported efficiency tended to be lower in the private than in the public sector, resulting in part from perverse incentives for unnecessary testing and treatment. Public sector services experienced more limited availability of equipment, medications, and trained healthcare workers. When the definition of “private sector” included unlicensed and uncertified providers such as drug shop owners, most patients appeared to access care in the private sector; however, when unlicensed healthcare providers were excluded from the analysis, the majority of people accessed public sector care. “Competitive dynamics” for funding appeared between the two sectors, such that public funds and personnel were redirected to private sector development, followed by reductions in public sector service budgets and staff.


Studies evaluated in this systematic review do not support the claim that the private sector is usually more efficient, accountable, or medically effective than the public sector; however, the public sector appears frequently to lack timeliness and hospitality towards patients.

New ACLU Report Documents Destructive Impact of Prison Privatization

November 4, 2011 Comments off

New ACLU Report Documents Destructive Impact of Prison Privatization
Source: American Civil Liberties Union

The American Civil Liberties Union today released a new report providing the first comprehensive analysis of the destructive impact of prison privatization.

The report, “Banking on Bondage: Private Prisons and Mass Incarceration,” traces the rise of the for-profit prison industry over the past three decades and shows how private prison companies have capitalized on the nation’s addiction to incarceration to achieve gigantic profits. All the while, the report shows, mass incarceration wreaks havoc on communities by unnecessarily depriving individuals of their liberty, draining government resources and bringing little or no benefit to public safety.

+ Full Report

Portrait of Private Agencies in the Child Welfare System: Principal Results from the National Survey of Private Child and Family Serving Agencies

October 7, 2011 Comments off

Portrait of Private Agencies in the Child Welfare System: Principal Results from the National Survey of Private Child and Family Serving Agencies (PDF)
Source: National Quality Improvement Center on the Privatization of Child Welfare Services

The National Survey of Private Child and Family Serving Agencies (NSPCFSA) was developed to gather information on the critical role of the private sector in serving children and families involved with the formal child welfare system. Developed by the National Quality Improvement Center on the Privatization of Child Welfare Services in partnership with the Child Welfare League of America and the Alliance for Children and Families, NSPCFSA provides detailed information concerning the private agencies across the country serving the child welfare population, the services these agencies contract with public child welfare agencies to provide, and the inter-organizational relationships private child and family serving agencies have with other public and private entities.

Committee Report: TSA Ignores More Cost-Effective Screening Model

June 6, 2011 Comments off

Committee Report: TSA Ignores More Cost-Effective Screening Model
Source: U.S. House of Representatives, Transportation and Infrastructure committee

Airport passenger screening with private security screeners under federal supervision is dramatically more efficient and less costly than the all-federal screening model, according to a Transportation Committee investigative report.

The report, entitled “TSA Ignores More Cost-Effective Screening Model,” compares costs for the two passenger screening models. A private-federal screening option, known as the Screening Partnership Program (SPP), was established in the Aviation Transportation Security Act (ATSA) after September 11, 2001. This program enabled airports to “opt out” and request the use of private screening contractors under federal Transportation Security Administration (TSA) standards, supervision and oversight. Beginning in 2002, five airports operated under the private-federal screening model. That number has increased to 16, with many other airports requesting to utilize this option.

In January, TSA concocted a decision to pull the plug on allowing more airports to opt out, despite the law and Congress’ intent that airports have the legal right to utilize the private-federal screening model. “This comprehensive report clearly debunks TSA’s position and efforts to undermine this cost-effective program,” said U.S. Rep. John L. Mica (R-FL), Chairman of the Transportation and Infrastructure Committee.

“The report clearly demonstrates that screening under the private-federal model is dramatically more cost-effective compared to screening conducted by TSA,” Mica said. “If the nation’s top 35 airports opted out, we could save taxpayers $1 billion over the next five years.

+ Full Report (PDF)


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