State and local governments across the country are struggling with the public's demand for better public services for less money. Under outsourcing the government entity remains fully responsible for providing the service and maintains control over management decisions, but a nongovernment entity carries out the function or performs the service. This is the most common privatization method and includes contracting out, granting franchises to private firms, and using volunteers to deliver public services. An asset sale involves transferring ownership of a government asset to a private party. The government rarely has a role in overseeing or managing the private company.
Commercialization occurs most often at the local level.
Vouchers are government-financed subsidies given to people to use in purchasing specific goods or services on the open market, from either the private or public sector. In the last few years, Michigan state government has engaged in several privatization efforts. The commission encouraged the various departments to review each activity and every program in state government to find candidates for potential privatization. Although the commission no longer is active, a recent report by the Senate Fiscal Agency concludes that department participation in the commission's efforts varied widely and that most activities privatized under the commission's auspices did not result in cost savings to the state. The commission's main accomplishment was to increase public and policymakers' awareness of privatization as a practical alternative.