Deck 12: Privatization and Public Administration

Question 1

In theory, privatization is supposed to result in cost savings and improved productivity because the public sector is

A) awash in rules, regulations and red tape.
B) motivated primarily by a desire to maximize profit.
C) public employees are incapable of providing good service.
D) All of the above statements are true.
E) None of the above statements are true.

Answer 1

A

Question 2

The most popular form of privatization arrangement in the United States is

A) vouchers.
B) contracting out.
C) load shedding.
D) asset selling.
E) None of the above.

Answer 2

B

Question 3

The form of privatization that has been very popular since officials fear the loss of political power attendant to shedding popular public services is

A) vouchers.
B) contracting out.
C) load shedding.
D) asset selling.
E) None of the above.

Answer 3

C

Question 4

Which of the following is a rationale for privatization?

A) The use of market forces is likely to improve public service delivery and cut government costs.
B) Government is inherently wasteful and inefficient, thus only private provision of services can keep costs down and improve productivity.
C) Privatization is a means of reducing the size and effects of government, and this is a desirable thing since a government that is too large presents a threat to individual freedoms.
D) All of the above are rationales for privatization.
E) None of the above is a rationale for privatization.

Question 5

Nonprofit agencies have clear advantages over the private sector when delivering services where the tasks

A) generate vast amounts of profit.
B) require compassion and commitment to people.
C) entail an especially technical or specialized approach.
D) are widely available from multiple vendors.
E) can be replicated by government agencies in the event of default.

Question 6

Which of the following is TRUE regarding privatization trends?

A) Governments have only recently begun to use privatization.
B) While the federal government has moved aggressively to adopt privatization, state and local governments have not.
C) President George W. Bush's efforts to privatize federal government is a continuation of a long-standing trend.
D) All of the above are true.
E) None of the above are true.

Question 7

The two major federal government voucher programs are

A) food stamps and Medicare.
B) Medicaid and Head Start.
C) low-income rent vouchers and social services.
D) social welfare and government services.
E) social services and school vouchers.

Question 8

Which of the following represent problems with privatization?

A) adverse selection
B) moral hazard
C) principal-agent conflict
D) None of the above.
E) All of the above.

Question 9

Courts have held that government is responsible for the actions of private actors when

A) the contract clearly expresses that private vendors are not responsible.
B) private contractors are negligent in meeting the terms of the contract.
C) the government is negligent in overseeing the terms of the contract.
D) the contractor exercises power traditionally exclusively reserved to the state.
E) private vendors exceed the scope of their authority.

Question 10

Which of the following statements about civil society and privatization is TRUE?

A) Some analysts assert that the distinction between the public and private sectors is blurring in a way that is undermining civil society.
B) Some voice a concern that as more nonprofits receive the bulk of their operating revenues from the government, they could develop an unhealthy dependence on the public sector.
C) If transferring functions to the private sector means that citizens are treated more like customers and less as citizens, then public accountability is eroded.
D) None of the above is true.
E) All of the above are true.

Question 11

Privatizing public functions guarantees a diminution of government power.

Question 12

Criticisms of market-like arrangement revolve around public accountability issues.

Question 13

The principal-agent conflict reflects a situation in which the wrong firm is chosen to do something and the desired outcome fails to occur.

Question 14

Competition is the key factor in cost savings, rather than simply whether a private firm or government provides the service.

Question 15

Primary reasons for privatization include cost savings, flexibility, less red tape, high-quality service, lack of government personnel or expertise, and speedy implementation.

Question 16

Until the 1990s, privatization of social services was uncommon at the local level.

Question 17

Since the 1980s, public employee unions have largely supported the transfer of public jobs to the private sector.

Question 18

Charitable choice provisions enable churches and other welfare services to receive federal funds to provide services to low-income people.

Question 19

In recent years, state and local governments have moved to curtail the expansion of privatization initiatives.

Question 20

The chief political reason for privatizing stems from a desire to reduce the size of government agencies and programs.

Question 21

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Privatization

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 22

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Load shedding

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 23

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Vouchers

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 24

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Asset selling

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 25

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Charitable choice

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 26

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Faith-based organization

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 27

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Moral hazard

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 28

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Principal-agent conflict

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 29

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Public function test

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.

Question 30

Matching Exercise
Match the concepts in the left-hand column to their counterparts in the right-hand column.
-Adverse selection

A) Reform legislation that allows religious institutions to receive government funding to provide services.
B) An arrangement where governments sell off companies or other assets.
C) The transferring of functions and property from the government to private for-profit or nonprofit entities.
D) An entity whose principal mission is religious.
E) A situation where the goals of the government and the private provider are likely to differ.
F) The determination of whether a power is traditionally reserved to the government.
G) A situation where the wrong firm is chosen to do something and therefore the desired outcome fails to occur.
H) A situation where a private provider fails to perform as desired because the government can not monitor the organization.
I) Government coupons that allow citizens to purchase services from a private provider; the government agrees to pay the organization the amount of the coupon.
J) A situation where the government stops providing a service or good for the citizens which forces them to turn to other providers.