privatization
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Privatization’s Pretensions

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Privatization has its fans and its foes. It deserves both. But the fans and the foes need to be clear about what they are cheering or jeering. The case for privatization—understood herein as the contracting out of government services to the private sector—has centered on its technocratic promise of efficiency and cost savings: “reinventing government” as leaner and meaner. The case against has, in turn, rested largely on accountability concerns—the excessive delegation of sovereign authority paving the way for private contractors to abuse their discretion, evade oversight, and generate unanticipated cost overruns.

Notwithstanding the current and long-dominant debate in privatization circles focusing on efficiency versus accountability, government outsourcing appears to have more subtle applications that do not map onto this conventional terrain. Indeed, policymakers turn to privatization for more than the customary, and ostensibly exclusive, objective of providing the public with the same goods and services more efficiently than the government bureaucracy can. They use government contracting in a way that substantively alters (or temporally ossifies) the very policies they are supposed to be neutrally administering. The act of privatization can thus directly change the outcome of regulatory rulemaking and enforcement proceedings, the programmatic content of government-sponsored educational, public health, and social welfare programs, and the trajectory of national security investigatory and military operations.

These practices—what this Article calls “workarounds”—are executive aggrandizing. Specifically, workarounds are government contracts, or provisions within government contracts, that provide the outsourcing agency with the means of achieving distinct public policy goals that—but for the pretext of technocratic outsourcing—would be impossible or much more difficult to attain in the ordinary course of nonprivatized public administration. In short, workarounds enable the executive to exercise greater unilateral discretion—at the expense of the legislature, the judiciary, the people, and successor administrations.

To care about workarounds, we need not be skeptical of executive authority, nor need we be hostile to privatization. We must simply appreciate that this powerful, potentially transformative phenomenon (1) raises novel questions that sound in separation of powers, intergenerational sovereignty, and democratic theory, and (2) has been overshadowed by the dominant, but analytically orthogonal, efficiency versus accountability debate. Because workarounds are undertheorized as well as underdeveloped as a regulatory matter, we currently lack the vocabulary, the data, and the tools to make thoughtful analytical and legal interventions. This Article seeks to change that.

Consider the following scenarios:
Exploiting Legal-Status Differentials. The Department of Homeland Security (DHS) would like to establish a data mining operation to gather intelligence on potential terrorist threats. Bristling under stringent federal privacy laws imposed on government officials—laws that inhibit DHS’s ability to collect and analyze personal information without court authorization—policymakers turn to private contractors. Contractors, like most other private individuals, are largely beyond the scope of these federal laws. For the most part, these laws were enacted well before contractors were hired with great regularity to assist with law enforcement and counterterrorism initiatives. Now, in an era where outsourcing is the norm, DHS may use the statutes’ narrowness to its advantage and award government contracts to the unencumbered private data brokers. The contractors can then acquire the information more liberally on their own and submit raw data or synthesized intelligence to the government. DHS thus gets the benefit of more sweeping, intrusive searches than would otherwise be permitted of government officials, short of their first obtaining warrants or securing legislative change.

Binding Future Administrations. A mayor who staked his candidacy on environmental consciousness loses his bid for reelection to an opponent hostile to Green governance. Days after losing the election, the directs his sanitation commissioner to enter into a long-term contract with a recycling company to conduct daily pickups throughout the city. This places the successor mayor in a bind: pay for services she inherited but deems unnecessary, or incur penalties in the form of damages to extricate the municipality from the recycling contract.

Sidelining the Civil Service. The Secretary of Health and Human Services (HHS) is entrusted to carry out the President’s family planning regulatory agenda. Rank-and-file staff opposition to the President’s agenda has effectively impeded the secretary’s mission. Frustrated by the civil servants’ resistance, the secretary does an end run around the bureaucracy and directs the contracting out of the next round of family planning research and regulatory rule drafting to a private think tank. Perhaps already ideologically aligned with the President, or simply eager to be seen as a go-to resource (for purposes of receiving follow-up contracts), the think tank supports the administration’s position more readily than the politically insulated, de facto tenured members of the civil service. Ultimately, the research and recommendations of these contractors, not the newly sidelined bureaucrats, shape the administrative record and provide support for the administration’s promulgation of sweeping new rules.

Baiting and Switching. For a military engagement of waning popularity, the Pentagon needs 400,000 troops; realistically, it has less than half that number available. But, the Pentagon is able to work around the shortfall by calling forth a phalanx of private contractors. As a result of the private recruitment, these contractors, who are far less visible to the American public, serve at a roughly 1-to-1 ratio with US military personnel. Their presence dilutes body counts (as contractor fatalities are not officially tallied or publicly announced) and thus obscures the full extent of the human costs of war. Their presence also allows the government to avoid politically difficult policy decisions regarding whether to withdraw, scale back the engagement, reinstitute a civilian draft, or seek outside support from a broader coalition of willing international partners.

All of these scenarios capture something scholars and government regulators have largely overlooked: outsourcing can be executive aggrandizing. Notwithstanding their potential to rearrange policy landscapes and to affect underlying distributions of power among democratic actors and institutions, workarounds have not readily been called into question by the prevailing, efficiency-focused regulatory regimes employed in the United States. Nor have they figured prominently in the legal scholarship. To date, legal scholarship has instead tended to focus on privatization in terms of the Executive’s ceding of sovereignty, rather than its amassing of it; and relatedly, on contractor waste, abuse, and fraud, and the inadequate government oversight that invites it.

Problems of inefficient or rogue contractors taking liberties with the discretion afforded to them as government proxies are analytically distinct, however, from the phenomenon of government officials orchestrating workarounds through private proxies. In the case of contractor manipulations, we have private agents cutting corners—at the government’s expense—to maximize profits or minimize their effort. In the case of workarounds, we often have perfectly dutiful, lawabiding contractors contributing (at times unwittingly) to policy alterations. Indeed, contractor accountability is the wrong concept to invoke with respect to workarounds. If anything, the concern with workarounds is the converse. Contractors become too accountable—too attentive to the principals that hired them—while the Executive, in turn, may be acting as an unfaithful agent to the rest of the government. That is, workarounds require us to examine a heretofore underappreciated principal-principal-agent relationship, with particular focus on the relationship between the Executive, charged with the responsibility for directing public administration, and the various other principals both within government and among the electorate to which the Executive then owes duties of fidelity.

In recent years, I, along with several others, have started down the path of identifying nontechnocratic, policy altering dynamics incident to privatization that amount to what I now call workarounds. This Article—the first to put workarounds squarely on the map—stands on that foundation. Specifically, this Article introduces the concept of workarounds as a multilayered, durable, and trans-substantive phenomenon capable of surfacing in mundane as well as radical outsourcing contexts. In the following parts, this Article: (1) defines and locates the government-contracting process failure that enables workarounds, namely the Executive qua unfaithful agent; (2) develops an overarching typology for workarounds organized around the Executive’s (arguably breached) duties to four distinct subsets of governmental principals; (3) demonstrates that the traditional efficiency-accountability debate, and the normative and legal framing of that debate, is at best tangential to the problem posed by workarounds; and (4) prescribes a protocol for analytical and regulatory interventions keyed to that typology. Ultimately, this Article makes the case why privatization workarounds warrant immediate inclusion in the lexicon of legal scholars, and immediate inclusion on the checklist of every government official engaged in or overseeing the trillion-dollar phenomenon that is American privatization.