Can a Private Corporate Analysis of Public Authority Administration Lead to Democracy?
67 Pages Posted: 20 Aug 2009
Date Written: October 1, 2006
Over the past ninety years, cities and states have increasingly shifted control and oversight over government services from elected officials to quasi-private entities, called "public authorities". Today, public authorities perform thousands of services previously provided by state and local governments, such as mass transit, economic development and housing. In executing these services, public authorities borrow more money than all of the cities and states combined, and in some states, such as New York, they issue over 90% of the public debt.
While public authorities are authorized to perform public services, they are specifically organized around a private sector model. The most common justification for structuring public authorities around the private sector model is that the model inherently achieves an increase in efficiency and independence in the provision of government services. Despite their rapid growth and increased issuance of debt, public authorities have received little critical analysis. Further, there is no existing standard to establish whether public authorities are meeting "efficiency, expertise and independence."
This article sets forth one such standard based on private sector norms. It evaluates public authorities based on: (1) corporate responsibility measures; (2) market forces; and (3) internal monitoring systems. Based on the analysis, the article proposes a restructuring of public services to form regional governments or municipal cooperation, rooted in collaboration and efficiencies lost in the provision of public services through public authorities.
Keywords: local, government, state, governance, public, public authorities, public authority, regional, services, public finance, pubilc financing
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