All Commentary
Wednesday, June 1, 1983

Book Review: Privatizing the Public Sector: How to Shrink Government by E. S. Savas


Chatham House Publishers, Inc., Chatham, N.J. 07928) • 164 pages • $15.00 cloth

“Public choice theory” in economics, as it has developed over the past decade or so, tells us that the public sector—government—possesses many inherent weaknesses as a provider of goods and services. For example, it has a tendency toward bureaucracy; it leans toward the creation of franchised monopolies; and it has little incentive to be efficient. By its very nature the public sector is a poor provider of economic services.

To “privatize” is to turn over to private citizens a task (provision of a good or service) heretofore carried out by some government entity. It means the establishment of creative, non- coercive, profit-seeking, marketplace mechanisms in place of the government’s power to tax, spend, regulate, confiscate, or monopolize. Privatizing is the peaceful way of dismantling the State brick by brick.

Savas establishes early on that there is an awful lot to dismantle. He identifies and explores in depth three major factors which have contributed to the enormous growth of government: a demand for more government services, by recipients of the services; a desire to supply more government services, by the producers of the services; and, increased inefficiency, which results in the seeming need for more government to do the same job.

Some free market believers may chafe at what appears to be a case for privatization that is less enthusiastic and more roundabout than need be. Savas, for instance, throws an occasional bouquet at that curious halfway method involving government-issued vouchers. Others may want to see less emphasis on the utilitarian (what “works”) approach and more emphasis on the philosophical (what advances individual liberty) approach.

In any event, Privatizing the Public Sector is a timely and thoughtful contribution to the issue of reducing the scope of government in our over-governed society. It should be welcomed and studied as a work of considerable value


  • Lawrence W. Reed is FEE's President Emeritus, having previously served for nearly 11 years as FEE’s president (2008-2019). He is also FEE's Humphreys Family Senior Fellow and Ron Manners Global Ambassador for Liberty. His Facebook page is here and his personal website is lawrencewreed.com.