Out of Control Policy Blog

Privatization and State Laboratories of Democracy

Following up on my post last week on the cancellation of Indiana's welfare modernization contract with IBM, there have been a mixed bag of opinions floating around in the state newspapers, some of which unfortunately paint the situation as a "failure of privatization," (which I argued earlier was a false interpretation). However, I found this sensible editorial in The News-Sentinel (Fort Wayne) to be spot on:

The failure of the plan should not be taken as proof that the effort never should have been tried in the first place. If we still believe in our republic's promise that states will be laboratories of democracy, we must accept experimentation. And some experiments fail.

The point is to learn from the failures. It could be argued that Indiana could have learned better from Texas, where a similar effort to privatize welfare failed spectacularly. And it should be argued that Texas and Indiana together provide a cautionary tale for other states planning such efforts.

But the focus should be on improving privatization efforts rather than eliminating them. Government can and must both serve its constituents and become more efficient.

Leonard Gilroy is Director of Government Reform


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