Reducing government spending with privatization competitions: A study of the Department of Defense experience

• 成果类型: Article
• 署名作者: Snyder, CM; Trost, RP; Trunkey, RD
• 署名单位: George Washington University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/003465301750160081
• 发表日期: 2001-02
• 页码: 108-117
• 关键词: ownership; EFFICIENCY; PRIVATE; performance; industry

摘要

In a privatization competition, private contractors bid against an in-house team to perform a governmental function that is currently performed by the in-house team. The Department of Defense initiated 3,500 privatization competitions from 1978 to 1994, generating estimated annual savings of $1.46 billion. We estimate a reduced-form model of the savings from these competitions that takes into account the premature cancellation of some competitions and the censoring of the in-house bid at current cost. The Department of Defense maintains a list of candidates for future privatization competitions. Using our model, we forecast annual savings of $5.74 billion if privatization competitions were completed for ail functions on this list.