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Outsourcing vs In House Production

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In your opinion, is contracting a government service out to some private firm the best way? Does it make economic sense to contract out some government services?

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Solution Summary

The benefits and drawbacks of outsourcing production of government services and medical transcription.

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Outsourcing government services, or privatizing them, is often seen as a way to make these services more cost-efficient. The government tends to be wasteful, because they are not profit-driven. A private company must be efficient in order to remain in business. Some government services are best outsourced, because there are many private firms that have the specialized equipment and labor in place to perform them. Water and utilities are the most obvious examples of such outsourcing. The government would naturally be responsible for ensuring that a community has access to water and electricity. Generally such sectors are considered "natural ...

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