Today more than 50 percent of state and local social services are provided by contractors. The impetus for privatization stems from two streams of thinking. Many advocates see contracting out as a way to reduce the size and scope of government. These individuals make several assertions. Government has strayed from dispensing basic public goods like defense and public safety into dispensing services also furnished by the private sector.
Government delivers inferior services which are inefficient and effective.
Low income citizens who must depend on government programs like housing and health care resent their mediocre quality. The middle and upper classes dislike the diversion of income into activities best left to the private sector. A second stream of thinking argues that efficient and effective services require assigning service production to the private sector. Government finds itself bound by rules and procedures that make it difficult to deliver quality services at a reasonable price. Private contractors operate without hefty public sector fringe benefits that were granted in response to public employee pressure.