Thursday, November 4th, 2010

The Privatization-Industrial Complex

My latest post is up over at New Geography. It is called “The Privatization-Industrial Complex.”

This piece discusses the structural conflicts of interest that exist among the various professional advisors and financiers that help cities with privatization transactions. While I’m sure almost all of them are both technically competent and very ethical, the fact remains that these companies have every incentive to promote privatization because it is how they make their money. With long term, high dollar value asset sales and leases this is particularly critical, since most cities have little in-house or even in-town expertise in these types of complex transactions, and thus are at the mercy of what their advisors tell them.

Cities need to be extra-cautious and establish a robust process to protect the public interest in these transactions.

1 Comment
Topics: Public Policy, Strategic Planning

One Response to “The Privatization-Industrial Complex”

  1. Alon Levy says:

    In some areas, privatized industries can be political forces to create more jobs for themselves, even more so than the public sector unions. For example, the privatized prison industry is a major force behind initiatives that lock more people up, such as anti-immigrant laws in Arizona, and lobby for continuing the drug war.

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