The Privatization Decision

Abstract

In this article, the political environment of privatization and its impact on public management are examined in the context of the privatization of a state park in Georgia. The study specifically focuses on the actions of public managers in the privatization formulation and implementation stage. Public management capacity actually increased as a result of privatization. This is an outcome quite different from those reported by public management studies of other privatized services. Applying a principal-agent framework, this study yielded several lessons that may strengthen public managers’capacity to act as “smart buyers” of goods and services and to enforce accountability when managing contractual relationships. This study links theory to practice using a case study that allows a careful examination of the strategic responses of public managers confronted by largely political, as opposed to economic, pressures to privatize an already successful state park.