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David McDonald

What makes a service "public?"

[photo of David McDonald]

Privatization is the practice of selling off public services to for-profit organizations. A broad definition also includes the widespread practice of forming public-private partnerships. Its proponents say privatization cuts government costs while improving efficiency in the delivery of essential services for citizens.

Dr. David McDonald, professor and head of Global Development Studies at Queens, has been challenging privatization through his co-leadership of the Municipal Services Project (MSP). The ambitious undertaking, originally launched in 2000 and funded in Canada by the International Development Research Centre of Canada (IDRC), includes researchers from universities, activist and labor groups and nongovernmental organizations around the world.

The project's first two phases examined electricity, water, health care, and waste management privatization in South Africa. MSP researchers discovered that while privatized utilities reaped profits and wealthy citizens enjoyed a reliable supply of high quality services, millions of low-income south Africans had their services cut off because they couldn't pay their bills. This widespread hardship among the most vulnerable populations was a direct result of the application of market-oriented management principles that are part and parcel of the ideology of privatization, says McDonald.

"Privatization erodes the public service ethos," he says. "All of a sudden it's acceptable to cut people off for not paying their bills because it improves the bottom line, even if the service is owned and operated by the state. The goal of cost recovery becomes more important than trying to figure out how to help poor people by cross-subsidizing those services."

[Books on a desk]

The MSP published dozens of papers and six books on the topic, and also produced radio documentaries that reached millions of people. It also attracted much attention from government policymakers, unions and the public. Nevertheless, powerful free-market interests continue to spread the privatization gospel around the world, with much the same results.

"Critics of privatization are shouting about the problems of privatization, but those in favour just aren't listening," says McDonald. "The research, some of it from very mainstream people, has overwhelmingly shown that privatization does not work. The challenge, then, is to ask ourselves 'what does work?'."

Answering this question has spawned an entirely new field of research, whose objective is to define what a "public" service is. Little academically-rigorous work has been done on the topic, but McDonald and his MSP colleagues knew that a working definition had to account for the fact that public services around the world are delivered in many different ways: through public-public partnerships, labor co-ops, community organizations, and other configurations.

The researchers wrestled with how to classify commercialized or corporatized public services – that is, enterprises that are entirely state-owned but operate according to free-market principles – but eventually included them in the definition. The only group excluded from the "public" definition was private, for-profit organizations.

[MSP logo]

The second task involved establishing a set of normative criteria that would allow researchers to gauge the success or failure of a public service. The eleven criteria included such measures as equity, participation, efficiency, quality of service and accountability.

That done, the MSP research teams conducted a "mapping exercise" of public services in the health care, water and electricity sectors in more than 40 countries in Asia, Africa, and Latin America. Their goal was to find noteworthy examples of "successful" public services based on the criteria. The fruits of the research are contained in the recently published book, Alternatives to Privatization: Public Options for Essential Services in the Global South.

"The book is an attempt to say, 'Here's what we mean by public, here's what we mean by successful, and here are a series of examples of these services in different sectors,'" says McDonald.

The MSP's next step is to expand on major themes identified in this work. One of the early by-products is a second book called Remunicipalization: Putting Water Back into Public Hands, a slimmer volume that contains case studies of cities that experienced failure with water privatization and have since made water public again. Canada's City of Hamilton is one of the examples, along with Paris, Buenos Aires, Dar Es Salaam and a series of municipalities in Malaysia.

Profile by Alec Ross
(e)Affect Issue 1, Spring 2012

Learn more about:
Dr. McDonald's research