How to Navigate the Politics of Privatization

Executive Summary

As more governments from the halls of Congress to city halls consider private sector delivery of public services, proponents in both the public and private sectors are finding a frustrating wall of obstruction, opposition, and delay-otherwise known as politics-blocking otherwise solid public policy initiatives. For elected officials seeking to privatize services, the role of politics in the governmental process is wellknown. For private sector firms, politics can seem an illogical force that slows and prevents efforts to make government function more efficiently. They often become impatient with a process that is cumbersome and antithetical to normal private-sector procurement methods.

This how-to guide shares lessons learned from both government officials and private firms at the front lines of privatization endeavors. These lessons may help others avoid the political pitfalls that can stymie a worthwhile privatization proposal. Survey data show that most public officials are persuaded of the efficacy of privatization as a policy tool but find the political barriers sometimes too great to overcome.

Political issues can quickly take center stage over technical and economic concerns when privatization is proposed. The dominance of politics often takes even seasoned public and private partners by surprise. We discuss a series of strategies for both sides of the partnership to cope with the politics of privatization.

For the private partners in a privatization endeavor, keys to success include:

  • Identifying key leaders;
  • Identifying stakeholders;
  • Developing a communications strategy with public leaders;
  • Knowing the political landscape;
  • Respecting the process;
  • Providing information;
  • Answering all questions; and
  • Being persistent and patient.

For the public officials in a privatization endeavor, keys to success include:

  • Keeping the process open;
  • Inviting the news media;
  • Knowing the private partner;
  • Developing a public relations strategy with the private partner;
  • Disarming the opposition;
  • Involving the opposition, especially employees;
  • Being ready to compromise; and
  • Providing information.