Customer Reviews

Cities and Privatization: Prospects for the New Century

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Greene's "Cities and Privatization" is an excellent primer on municipal privatization. Greene begins with a brief overview of economic theory and then gives numerous case studies of privatization. Privatization tends to be a polarizing concept but Greene remains impartial throughout his work.

The basic argument for government intervention in a city's economy is to eliminate market failures. With the correction of market failures the government can increase the utility of citizens. The basic argument for privatization is to increase efficiency in traditionally government produced services. Proponents of privatization claim that government is inherently inefficient while critics claim privatization doesn't work in practice.

Greene's conclusion is that competition is essential to increased efficiency. Who owns the factors of production is irrelevant as long as competition exists. Privatization offers a method to create competition between the public and private sector. Other important factors of privatization include clear contracts, effective monitoring, and clear legal action for firms that do not complete their contracts.

The only problem with Greene's "Cities and Privatization" is age. It was published in 2002 and almost all of the empirical evidence comes from studies conducted in the late 80's and early 90's. It would be nice to see a second edition.

I strongly recommend this book to everyone interested in privatization.