1. Privatization and Contracting Out
A Survey of the Literature

2. Dismantling the State: Madsen Pirie
The arguments in favor of “Dismantling” the State
Ideological or rational 
Problem areas of public sector performance
Production, Labor, Consumer, Administrative
The Deficiencies of Public Sector Reform
Efficiency, waste and budget control
Evaluation of Techniques of Privatization

3. Privatization as the key to Better Government: E.S. Savas
Comparison of Savas and Pirie
Arguments for Privatization:
Ideological
size of government
Pragmatic
normative, too big
Commercial
generate private sector development
Populist
empowerment, choice, and community based activities

4. Privatization as the key to Better Government: E.S. Savas
Keynesian vs. Neo-Orthodoxy
Arguments about exclusion
Private goods vs. toll goods vs. collective goods vs. common pool goods (bottled water, water, river, streets)
Worthy goods—in a social sense
health and education

5. Privatization as the key to Better Government: E.S. Savas
Services
Government—Taxes
Government—Fees, or tolls
Government Vending
Contracting
Intergovernmental or interdepartmental agreements
Franchises and Monopolies
Subsidies
Assessment of the Privatization Arguments

6. Private Provision—Contracting: Gabriel Roth
Private Sector
Indigenous vs. Foreign (or Pariah)
Contracting vs. Grants
Sub-contracting and sub-grants: Blurring the lines
Making the Choice
Contracting and Non-profits
Issues of privilege
Debate about transaction costs
Cost recovery vs. subsidies

7. Reinventing Government: David Osborne and Ted Gaebler
Steering Rather Than Rowing
Entrepreneurial Government
Earning as well as spending--charging fees and selling goods and services
Weberian Bureauracy
Bankrupt?
Third sector vs. Private sector
Use of Non-governmental organizations

8. Reinventing Government: David Osborne and Ted Gaebler
Community Based Government
Subsidiarity
People as citizens or consumers
Is there a difference?
TQM—add on to consumers
Government agencies compete with themselves

9. Reinventing Government: David Osborne and Ted Gaebler
Mission vs. Rules based government:
NASA and the Moon—Output based government
Incremental vs. Zero Based (or targeted) budgets
Decentralization
The Circle Rounds

10. Corruption—the Real Problem? Robert Klitgaard
Corruption as functional and cultural
Causes of corruption
Poverty vs. ethnicity
The Ethical Issues in a society of poverty
Obligation to family vs. obligation to society
The starving children problem
Are there benefits from corruption?
Getting things done means paying for it

11. Corruption—the Real Problem? Robert Klitgaard
“Rent Seeking”
Charges higher than market price
Corruption
Too much government or too much privatization

12. Corruption—the Real Problem? Robert Klitgaard
Graft
Bribery
Nepotism
Kickbacks
Insider bidding (wired)
Can and should corruption be controlled?

13. The Spirit and Intent of RSSAs and PASAs
Within a USDA / USAID Parnership

14. Historical Perspective
USDA and President Truman’s “Point Four” Program
administered the agricultural training and technical assistance programs
1950, Technical Cooperation Administration (TCA) created
Predecessor to USAID

15. Historical Perspective
1955, International Cooperation Administration (ICA)
All foreign economic development efforts were consolidated
USDA expertise and institutional resources were still critically needed
As a result, ICA and USDA drew up a major agreement to facilitate cooperation in technical assistance, training, and information dissemination

16. Historical Perspective
Passage of the Foreign Assistance Act of 1961 and the creation of USAID
A new General Agreement in 1966 laid the framework for cooperative relationships
USAID recognized "…the unique personnel resources, capabilities and experience of the Department”
sought to use this expertise through cooperation
USDA recognized "...its responsibility, within its authority, to contribute toward U.S. foreign policy by participation in foreign assistance programs"

17. Historical Perspective
General Agreement between USDA and USAID
Based on the premise of a partnership between USDA and USAID
emphasis on joint planning, coordination and consultation
The agreement is not like a contract
establishes operational guidelines and a spirit of cooperation to link the institutional resources of two government agencies in accomplishing U.S. foreign assistance goals

18. Historical Perspective
General Agreement between USDA and USAID
Agreement affirmed new partnership mechanisms to access USDA expertise:
Participating Agency Service Agreements (PASAs)
Resources Support Services Agreements (RSSAs)

19. Authorizations for PASAs and RSSAs
Sections 621(a) and 632(b) of the Foreign Assistance Act
Enables USAID officers to secure "technical assistance...in the field of education, health, housing, or agriculture..." by utilizing "…to the fullest extent practicable, the facilities and resources of the Federal agency or agencies with primary responsibilities for domestic programs in such fields..."

20. Authorizations for PASAs and RSSAs
Amendment to Section 621of the Foreign Assistance Act
Participating Agency resources must be particularly or uniquely suitable for technical assistance;
Are not competitive with private enterprise; and
Can be made available without interfering with domestic programs

21. Authorizations for PASAs and RSSAs
Economy Act
Requires both the Secretary of Agriculture to certify that assisting USAID is in the best interest of the Government and USAID's Administrator to ascertain that "…the ordered goods or services cannot be provided as conveniently or as cheaply by a commercial enterprise."

22. Authorizations for PASAs and RSSAs
Office of Management and Budget’s (OMB) Circular A-76
USAID can enter into PASAs or RSSAs with USDA only if the following conditions are met:
USDA resources and expertise are used for technical assistance;
USDA can provide technical assistance better than USAID, the private sector or another Federal agency
USDA has a formal program for managing excess personnel capacity that allows staff to provide assistance under RSSAs and PASAs; and
USDA services are not competitive with private enterprise.

23. Authorizations for PASAs and RSSAs
Office of Management and Budget’s (OMB) Circular A-76
Before a RSSA or PASA can be approved and issued, a detailed justification must be provided on USDA's unique suitability, and all other A-76 requirements must be met

24. “Spirit and Intent” & Responsibilities in Implementing PASAs and RSSAs
USAID’s Handbook 12
Defines PASAs as agreements with other Federal agencies for specific services or support tied to a specific project goal and performed within a definite time frame

25. “Spirit and Intent” & Responsibilities in Implementing PASAs and RSSAs
Normally issued by Missions for support outside the U.S., but can be used to carry out a specific goal or goals of an AID/W project

26. “Spirit and Intent” & Responsibilities in Implementing PASAs and RSSAs
Agreements funded in AID/W for continuing general support assistance, usually provided in an AID/W office, and have no specific, readily measurable goals to be accomplished within a set time period
In the 1990's, most USDA/USAID agreements have been RSSAs

27. “Spirit and Intent” & Responsibilities in Implementing PASAs and RSSAs
Intent and Spirit of PASAs and RSSAs
Strengthen the partnership between USAID and USDA by fully utilizing Departmental competence, resources and experience and exchanging critical information and knowledge to benefit both agencies

28. “Spirit and Intent” & Responsibilities in Implementing PASAs and RSSAs
Staff Responsibilities
RSSA and PASA staff should have a clear understanding of USDA's unique capabilities as the world's largest source of technical expertise n agriculture, natural resources management, and related areas
RSSA staff should cooperate and interact with USDA agency employees having mutual interests whenever possible

29. “Spirit and Intent” & Responsibilities in Implementing PASAs and RSSAs
Staff Responsibilities
Sharing RSSA knowledge with Departmental officials can positively impact U.S. agriculture and USDA goals
can ultimately advance development efforts

30. RSSA Human Resources USDA hiring for RSSA positions:
Recruits from Departmental agencies and land-grant university network first, drawing on its unique pool of expert resources nationwide
When USDA makes decision, USAID is asked to concur

31. RSSA Human Resources USDA hiring for RSSA positions:
Once appointed, RSSA employees receive technical advice and guidance from their USAID Project Officer, but their official supervisor is at USDA
RSSA performance appraisals are determined by the USDA supervisor
With input from USAID Project Officer
RSSA employees' annual work plans should also be developed consistent with USDA policies and objectives

32. In Summary
Through collaboration and cooperation, benefits will continue for U.S. foreign assistance as information and knowledge flows from USDA to USAID
Equally important - benefits will flow from USAID to the Department
RSSA employees play a crucial role in facilitating this exchange and are key to sustaining the long-standing partnership between the two agencies