ON-Lion Letter
When most Americans think of privatization, they envision businesses delivering public services, such as garbage collection or the management of correctional facilities.  But today, privatization often involves cities and states selling or leasing government assets in order to raise funds.  Some of these arrangements have led to beneficial outcomes, but others have resulted in problematic consequences that last for years.  Why?  What factors make success more likely?

In a July report from the Manhattan Institute for Policy Research (MI), senior fellow Aaron M. Renn offers answers.  In The Lessons of Long-Term Privatizations: Why Chicago Got It Wrong and Indiana Got It Right, Renn analyzes two recent privatization efforts -- the leasing of Chicago’s parking meters and the leasing of the Indiana Toll Road -- and he examines why the Chicago deal has been universally regarded as a civic debacle while Indiana’s lease has been assessed by many as a good deal for that state.

In his report, Renn argues that the keys to successful privatization include:  carefully choosing which public assets will be privatized, allowing adequate time for public review of any leases before they are approved, thoughtfully managing the transition from public to private operation, and avoiding deals that involve regular, recurring compensation payments to concessionaires. 

Renn’s full report and his additional recommendations for cities and states seeking to engage in long-term privatization efforts may be found online.

In addition to serving as a senior fellow at MI, Renn has more than years of experience in management and technology consulting.  He is a contributing editor of City Journal and an economic-development columnist for Governing magazine. 

The Manhattan Institute is a leading free-market think tank focusing on economic growth, education, energy, environment, health care, legal reform, public sector, race, and urban policy.  For over 30 years, MI has been an important force in shaping American political culture and developing ideas that foster economic choice and individual responsibility.

The Lynde and Harry Bradley Foundation in Milwaukee substantially supports the Manhattan Institute.

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