Study Finds Bureaucratic Turnover Hurts City Efforts to Privatize Services

A forthcoming study in the fall issue of State and Local Government Review finds that turnover among city administrators, and not mayors, makes efforts to privatize public services nearly impossible.

September 18, 2003

BIRMINGHAM, AL — A forthcoming study in the fall issue of State and Local Government Review finds that turnover among city administrators, and not mayors, makes efforts to privatize public services nearly impossible.

In recent years, more American cities have turned to the private sector to provide public services to its citizens. With privatization, cities can offer services such as health care and programs for the elderly more efficiently and for less money. The use of private firms has in turn led to an increased use of the competitive bid process to select private firms to provide the services.

In the study of 237 U.S. cities with populations of 25,000 or more between 1988 and 1994, the researchers examined the influence that mayoral and city administrator turnover and the racial makeup of the cities had on contractor choices for providing mental health programs and elderly services. They found that private sector organizations often resisted submitting bids in cities where the city manager turnover was high, leading to what the researchers call “privatization failure.”

“Private companies and non-profits want long-term deals,” said University of Alabama at Birmingham (UAB) political scientist Christopher Stream, Ph.D., a co-author of the study. “If the city managers are rotating, it is seen by non-profits and by for-profit organizations as a sign of uncertainty and instability. But where city bureaucracies were more stable, the city was better able to innovate by contracting with non-profits.”

In contrast, mayoral turnover tended to have a positive impact on efforts to contract out services, they found, suggesting that electoral turnover does not cause the same problems in contract negotiations, enactment and enforcement that are caused by administrative turnover.

The study even suggests that term limits, which guarantee substantial turnover of elected officials, may in fact have no impact on the choice to privatize.

The researchers advise cities with high city manager turnover to recruit managers who are more likely to stay on the job. However, for cities with high administrative turnover, privatizing services or converting to a city-manager form of government should be avoided.

The study’s co-authors are James Clingermayer, Ph.D., of Western Kentucky University and Richard Feiock, Ph.D., of Florida State University.