About the author: Donald F. Kettl is professor emeritus and former dean of the University of Maryland’s School of Public Policy. He is the co-author, with William D. Eggers, of Bridgebruilders: How Government Can Transcend Boundaries to Solve Big Problems, published by Harvard Business Review Press.
Governments of all ideological persuasions spent much of the 1980s and 1990s working hard to push many governmental functions to the private sector. While one can debate the efficacy of this effort, the campaign to privatize the public sector was unquestionably far-reaching. Much of the low hanging fruit of what can be privatized has already been privatized.
Since then, the world has moved from a push to draw sharp lines between government and the private sector to a blending of their roles. These days it’s often hard to separate the jobs of the public and private sectors. What’s changed is that the private sector has a growing and important role in creating public value.
And this is actually a very good thing.
The stakes are about more than the rising corporate attention to environmental, social, and corporate governance. Old lines are blurring. Profit and purpose, public and private, business and charity: the more we examine them, the more we see inextricable connections.
Consider refugee resettlement. Canada, with only a ninth of the U.S. population, resettled more refugees than any other nation in 2018. To do so, its government leaned heavily on a venerable private refugee-sponsorship program that, with community-based support from citizens, business, and nonprofits, handles two-thirds of Canada’s resettled refugees. This private program integrates refugees more smoothly into communities than many government-sponsored programs.
Then there’s America’s Medicare and Medicaid programs, which fund health care to both older and poorer Americans and which account for about one-fourth of the federal budget. However, the federal agency managing these programs, the Centers for Medicare and Medicaid Services, has only about 6,000 employees, or just 0.3% of the federal workforce. The front-line work happens through private health care providers and clinics. They submit the bills to private companies that manage the payment system.
People in the Medicare and Medicaid programs regularly get letters displaying the CMS logo. But the letters come from private contractors in charge of making the programs work.
Are Medicare and Medicaid public or private programs? That question increasingly makes no sense. The lines have become blurred between private health care workers providing care, private contractors managing the payments, and federal workers steering the program. The public programs couldn’t work without their private partners. And the private partners play an essential—and growing—role in creating genuine public value for the programs’ beneficiaries.
At the local level, Austin’s Community First! nonprofit has created a remarkable collection of programs to help those experiencing homelessness in the area. Its founder, Alan Graham, put aside a prosperous real-estate career to work on the problem. “Our thought as Americans,” he explained, “is that, to fix homelessness, we go build houses. But that dog don’t hunt.”
Instead, Graham said, “What people need is community. We need each other.” So he created a “Tex-Mex theology” that grew into Austin’s largest program to feed those without food, with a fleet of food trucks and an army of 20,000 volunteers. “Everything we do is about relationships.” He continued, “We merely use food as a conduit to connect human to human and heart to heart.”
From this effort has come an entire community, supported by micro-homes, 3D-printed houses, and a collection of social services. The program has been a huge success. As one resident who had struggled with drug addiction and mental illness and homelessness said, “It’s a place where you can get dignity again.”
In Houston, the Coalition for the Homeless has served as the lead of an orchestra far more complex than any conductor has ever faced. More than 100 different organizations in the community play some role in helping reduce homelessness. Together, led by the Coalition’s president, Mike Nichols, and supported by the city and federal aid, Houston has reduced homelessness by 63% since 2011.
Was this a public project? Or a private one? The question makes little sense, because the public-private partnership was seamless. What does make sense is the great progress that Houston made because the nonprofit coalition led an effort across the sectors to create public value.
The ongoing debate about turning more of government over to the private sector is focused on precisely the wrong issue.
As we found in our book, Bridgebuilders, effective public programs depend on convening key players across the sectors, adopting a “network” mindset, and creating a welcoming environment in which all the partners can contribute to their shared goal.
Even more important, private organizations not only have become close partners of the government in producing public programs. They have also become front-line groups that themselves create public value, whether by investing billions of dollars in sustainability or sending rockets into space for scientific exploration.
We no longer have to engage in the parlor game of deciding just where to draw the line between government and the private sector. Instead, it’s time to acknowledge where the real synergy is: in robust partnerships between the sectors that often lead to better progress for everyone.
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