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Privatization of Administration Services As Deception

Recommendations by the Niti Aayog on July 2017 stating privatization of certain administrative services have sparked interest in the recruitment of administrative personnel based on efficiency and who posses technical knowledge such that services to the citizen can be done more efficiently and effectively . As stated before in this article privatization of administrative services by sub contracting has not been prevalent feature in India but regarding other nation privatization has been common feature in other nation (mostly countries which are capitalistic in economic structure) which are considered super power in the present century . In this paper work we tend to understand how privatization of administrative services in foreign countries take place and how it has legal implications and it violations so the readers can get a clear idea regarding pro and cons of privatization of administrative services. As lpg or new economics policy is the future of India’s economic and political scenario.

In this project we tend to focus on the privatization of administrative services in other foreign countries.The concept of privatization administrative services is more over like that of out outsourcing ,the concept of privatization of administrative service disagree with concept of pre emption (basically cannot over power laws made by central government in the 3rd list in the 7 schedule of the constitution which states legislation cannot make laws on which are repugnant to the laws made prior by the state ) due process of law , separation power , etc there has been recent development of cases regarding privatization and its inefficiency in its dealing with the citizens of the state (foreign state) . These disputes include, involving private prisons or schooling health care or welfare services which are contracted to private firms for providing these services.

By privatization here we do not mean the regular definition of privatization as in India where government sells shares in a public monopolistic company or abandoning such government owned companies such as the new economic policy in India. By privatization here means some sort of deregulation which the government does to private firms in other words it is a sort of outsourcing of certain works like that of private firms do in order to reduce cost . But both out sourcing and privatization are not the same in sphere meaning or motive as outsourcing is purely economic in character which is neutral by the term as it might be positive by saving million in money by outsourcing or it might be neutral or it might tend to lead to loses. In other words say it might be good or bad but privatization of administrative services can only be a positive term. Question regarding why might be obvious, because privatization tend to create distinction between bureaucracy (bad and inefficient) and free market forces (seen as more efficient and good).So as stated before privatization basically means contracting with private firms for rendering services to the public more efficiently and effectively . In this project we look at the limitation of privatizations of administrative services from the point of view of technical matters such as incentive, delegation, reduction in privatization in foreign countries, etc.

Discretion and types of contractual privatization of private firms
Regarding discretion to outside firms to whom administrative services are contracted with either have little or no discretion to high amount of discretion, perfect examples would be the building of road and contracting for application for raw materials like concrete or other examples like contracting for plat forming a particular road ,providing labors etc , On the extreme end with high level of discretion is need such as contracting for private prisons or welfare initiatives and eligibility for government services validating , etc . Involve high degree of discretion; the question at hand is whether such discretion might lead to violations based on motive of self-interest of the contracting private firm. Which might harm the society to a greater extent , legally and in utility derived from such services.

Going into more details regarding contractual arrangements there are three types of contract regarding privatization of administrative services.
1) Price – per- case contracts(usually found in private prison or juvenile detention centre Arrangements)
2) Flat free contracts(to provide services for term of period with extension clause)(usually these types of contracts are found in licensing agency and child welfare centers)
3) Incentives contract( which works for attaining efficiency or goals as prescribed by the government agency fulfillment of with will the contractor will be paid such incentive for providing such service services)

One of the most important drawbacks for such privatization is self interest of the private firms rendering service. Dividing it into 3 types due to the types of contracts as mention above.

Per case fees in this case the government agency privatize their functions to outside firms for a fixed fee for each problem or case it handles.

In theses case if there service is based on incentive for application or final determination the private firm will quickly survey such application ignoring vital factors to receive such incentives; Eg was found in Australia a company Maximus co ltd to receive such incentive from that such final determination clause violated many legal provisions such that for its own self interest. Going through the application in a rapid manner without noticing important detail hence lead to violation of administrative services.

A practical example is to deny cases of application for more the applicant will reapply leading to double incentivization from the government agency.

Example took place in Connecticut a district in America where company named colonial cooperation inc which was to make legibility determination for disabled based assistance which was to give 122 dollars for each such application received and hence the company for monetary benefits rejects these application to receive 2ndreapplication for applicants and hence receives money for the second time .This problem was very much shows resemblance to Brown vs Vance and Doss vs Long where such argumentation on violations were invalidated.

Further these types of privatization contracts violate the neediest of the society, due such rejection of initial application which leads to unwanted delay adding months or even years to receive green lights for such second application. Many of those who need the government help the most are as well are not able to receive such services.

This lead to the growth a new form of contract known as incentivization contracts where government agencies contract with private firms where the private firms are rewarded for achievement of certain targets or goals specified ,either be it efficiency in quality of service or as mentioned by bureaucracy or government policy. This type of contracts were famous during the 1990s where it was named welfare to work campaign
One of the pitfalls of this form of contracts is the balancing the weight of different consideration being it taxpayers goals or policy goals accountability to different political consideration etc. This apart being budgetary constrains hence due to these budgetary constrains the contacting firm tend achieve certain goals which are of importance to maintain the contract.

The second significant problem in incentivization contracts is churning, meaning that the private firm can easily take up individuals applicants for those most likely to succeed which produces or triggers bonus or to reject applicants who are likely to fail

Eg: The national association of child advocates has published as series of studies on privatization of child related welfare services child support collection , In this case the private firm pick and choose from those applicants who are like have success , as the judgment given was likely to achieve overall goals of the policy and not just a be a appropriate strategy for profit maximization of the contacting firm.

The third and most important form of contract is flat free contracts which are most commonly used through the world, where privatization is part of bureaucracy. This type of contracting is very much similar to that of government servants today who are paid salaries regard less of their productivity or efficiency. Where by the same problem is faced in this types of privatization contracts where the private firms get paid regardless of their productivity as their term of service is fixed .Hence these firms do minimum to keep their contracts.

Eg for this scenario is again expressed in Maximus Inc a well-known private administrative firm, which ran child support programme in Colorado America in 1995 nearly one out of the seven districts have complained on bad treatment of citizens when reached out to receive such services further case work from district attorneys office explained the reasons for non renewal of contract for services provided by Maximus Inc as many clients services were not worked out.

To prevent these neglecting of work by constant monitoring but such strict monitoring would defeat the purpose such deregulation or outsourcing as it would lead to further costs and lead to budgetary constraints, one might say of switching of contracting companies but such is not possible as those bidding are few companies hence choosing from these companies would make no difference in productivity. As stated before there is least amount of bidders in competition for government contracts and only those firms which have a large back cost portfolio tend to bid in these contractual bidding hence the choice to choose different companies by government is very mere and hence leads to finding of inefficient private firms which in turn tends to harm the citizen of the state.

Delegation and contractual language
One of the main back draws of privatization is delegation and contractual language as used in statue which empowers the government agency or contract which sub delegates to private firms. As the interpretative aspect of delegation is complex and is cocoon in which the agencies get over powered and go beyond the scope of delegation.

The terms that are more general confer more discretion on the agency. Appropriate terms limit the ambit of the agency’s decision making and discretion power. These agencies in turn sub delegate to private firms through contracts. What is the question in doubt is contractual interpretation and statuary interpretation is both different, further pushing the question into detail judges or courts feel doubtful as to use the statue or the contract at hand to evaluate the private firm’s action. a statue and a contract are two different regarding genres of legal text and concepts and hence creates problem regarding , whether a such private firms action are to be interpreted on the basis of contract or the statue .Which in turn restricts the privatization decisions.

Coming to a understanding of privatization
We can understand that privatization has a lot of limitations inherent in it as it is not good as stated before like while moving from government bureaucracy( inefficient) to market capitalistic forces( which is good ). Recent studies regarding privatization (2000- 2014) has shown surprising decline in many constituencies of America and Canada and even Australia .Even private prisons have shown great decline in number as to privatization of services , comparing services to 2000- 2014 to that of 1980 to 1995 has shown great number in decline these empirical study has shown that privatization was increasingly popular in 1980s and 1990s (49%)but has show downfall ever since 2000 to 2014(22 %) overall in American scales alone . The reason for such abandonment of privatization is due to economic social and political reasons. Regarding the economic perspective study Mildred warren and company of members have studied in detail the municipal corporations and public services bodies shows that privatization has not saved any cost at all but rather put more budgetary constrain in the government body. The experimentation during Ronald Regan administration and George Bush administration has showed American administrative agencies that privatization as a defective glue to fix administrative problems.

Initially as the Niti Aayog proposed in privatization of administrative services as the solution to the problems of bureaucracy (it inefficiency etc) might be wrong as privatization in other nations must be a example to prevent the failure to following of privatizations. Further looking in to economic structure of our country as dual economic, perspective regarding privatization might get disastrous if put in to application as private firms would aim at profiteering rather that providing services efficiently. Hence it would be more of a pitfall than a solution to the current administrative problems and lead to further complication which might have a disastrous effect. As a detail study on this topic mainly regarding it limitation have give a clear scope to understand the real situational difficulties face by government establishing privatizations.

1) OECD PRIVATIZATION IN THE 21 ST CENTURY: recent experiences of OECD countries.
2)Nation library of Australia
3)Privatization of Public Services: Impacts for Employment, Working Conditions .
3) readying-a-new-list-of-psus-for-privatisation/article22818454.ece

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