Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, October 18, 1994                   TAG: 9410180084
SECTION: EDITORIAL                    PAGE: A-6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

THE POTENTIAL IN PRIVATIZING

Less, because privatization generally means contracting out work for which government remains ultimately responsible - an idea as old as the republic and the military contractors who supplied (and sometimes cheated) George Washington's Continentals.

More, because such contracting is seldom done in more than ad hoc fashion. Over time, careful but consistent application of privatization principles could significantly improve the effectiveness of government and, presumably, help restore confidence in it.

One of the stronger features in a document of mixed quality is the reasoned approach to privatization's potential in the draft report of Gov. Allen's Commission on Government Reform.

The commission's Procurement and Privatization Committee, in its section of the report, quotes David Osborne, author of "Reinventing Government": "Business does some things better than government, but government does some things better than business. The public sector is better at policy management, regulations, ensuring equity and preventing discrimination or exploitation. Business is better at innovating, replicating successful experiments, adapting to rapid change, and aborting unsuccessful or obsolete activities."

Following the spirit of Osborne's excellent insight, the committee's many detailed recommendations do not add up to a panegyric to business and an excoriation of government. They are, for the most part, a pragmatic and detailed attempt to set forth a policy by which the state can continuously assess various operations for their privatization potential.

Moreover, the committee wisely expanded its task to include suggestions for how more competitiveness could be introduced to operations within state government. (The possibility of privatizing can sometimes do wonders for an agency's efficiency.)

The report's emphasis is on establishing procedures and criteria for analyzing prospects for privatization and, where appropriate, implementing it. The sum of the potential for privatization in a multiplicity of mundane operations, from debt collection to road-kill removal, may be greater than the high-profile candidates like prisons or state-owned liquor stores.

Privatization has pitfalls, especially if there's inadequate planning or oversight. And cost-savings estimates based on averages elsewhere - 20 to 25 percent in other states, the committee reported, and 15 percent nationally in local governments and school districts - may prove too optimistic, at least initially. Because of Virginia's tradition of relatively uncorrupt and low-cost government, there may be less-than-average public-sector bloat here, which could make it harder to match average percentage savings in other places.

That's not an argument against looking for privatization potential: Even if savings proved somewhat smaller than average, the effort would be worthwhile. It's an argument merely against raising early expectations too high, so that a good idea won't come to an untimely end simply because it's found to be no panacea.