In memory of Elinor Ostrom (1933-2012)

With the death of Elinor Ostrom, activist and campaigners for social and economic justice have lost an important advocate and supporter.

Ostrom who was a Professor at Indiana University was the first woman to be awarded the Nobel Prize for Economic Sciences in 2009.

Ostrom's work challenged and rebutted fundamental economic beliefs, particularly free market and neo-classical economic paradigms. Ostrom was particularly concerned with relational aspects of economic activity — the ways in which people interact and negotiate with each other to forge rules and informal social understandings.

Ostrom's early work focused on what she called co-production. Ostrom argued that many public services depend heavily on the contribution of time and effort by the persons who consume these services, i.e., the clients and citizens.Ostrom believed that services rely as much upon the unacknowledged knowledge, assets and efforts of service ‘users’ as the expertise of professional providers. It was the informal understanding of local communities and the on the ground relationships that make services more effective.

Co-production describes the relationship that exist between ‘regular producers’, like health workers, police, and schoolteachers and their ‘clients’ who may be transformed by the services into safer, better educated and/or healthier persons.

Ostrom defined co-production as

“…the mix of activities that both public service agents and citizens contribute to the provision of public services. The former are involved as professionals, or ‘regular producers’, while ‘citizen production’ is based on voluntary efforts by individuals and groups to enhance the quality and/or quantity of the services they use”

One implication is that privatization of public services and the turning over of services to the market fundamentally transforms the relationship between provider and service user and hampers the development of co-production and democratic governance.

Her later work examined how people and communities collaborate and organize themselves to manage collective shared resources like forests, fisheries and natural and social resources. The research overturned the conventional wisdom about government regulation and challenged the idea that private ownership of public resources is better and more effective. Ostrom's work provides clear evidence that the commons-based traditions of cooperation and communal management of resources is not a violation of basic economic common sense.

Her work undermines political conservatives and mainstream economists who denigrate collectively managed property and government and who argue that only private property and the "free market" can responsibly manage resources. Her work also directly challenges current ideas that privatization and private ownership and expert management of resources is the most effective strategy.

Ostrom advocated a “polycentric” approach to managing shared or common resources involving oversight “at multiple levels with autonomy at each level. Ostrom argued that shared management of resources helps to establish rules that “tend to encourage the growth of trust and reciprocity” among people who use and care for a particular commons.

Ostrim argued that key management decisions should be made as close to the scene of events and the actors involved as possible.

Her work showed that the people most affected by or with a stake in a particular resource are the ones best able to collaborate to use and manage those shared resources effectively and sustainably.

Ostrom's work demonstrates the importance of shared (collective) rather than expert or private management of resources and knowledge and emphasises the importance of active citizen partcipation. She cited a comprehensive study of 100 forests in 14 countries that detailed how the involvement of local people in decisionmaking is more important to successfully sustaining healthy forests than who is actually in charge of the forests.

David Bollier writes of the significance of Ostrom's work:

In the 1970s, economics was quickly veering into a kind of religious fundamentalism. It was a discipline obsessed with “rational individualism,” private property rights and markets even though the universe of meaningful human activity is much broader and complex. Lin Ostrom pioneered a different, more humanistic way of thinking about “the economy” and resource management. She originally focused on property rights and “common-pool resources,” collective resources over which no one has private property rights or exclusive control, such as fishers, grazing lands and groundwater. This work later evolved into a broader study of the commons as a rich, cross-cultural socio-ecological paradigm. Working within the social sciences, Ostrom proceeded to build a new school of thought within the standard economic narrative while extending it in vital ways.

Ostrom's work also has direct relevance to the current economic and environment crises. She wrote:

"We cannot rely on singular global policies to solve the problem of managing our common resources: the oceans, atmosphere, forests, waterways, and rich diversity of life that combine to create the right conditions for life, including seven billion humans, to thrive.....Success will hinge on developing many overlapping policies to achieve the goals,.......We have a decade to act before the economic cost of current viable solutions becomes too high. Without action, we risk catastrophic and perhaps irreversible changes to our life-support system.”

Articles written in memory of her work are here, here, here and here.

A reading list of her work is here.

The last article she wrote before she died is here

Her last book, published just before her death was titled Working Together: Collective Action, the Commons, and Multiple Methods in Practice, and describes the advantages of using several different research methods to study a problem.

Phillip Pullman and the greedy ghost of market fundamentalism

"there are things above profit, things that profit knows nothing about.. things that stand for civic decency and public respect for imagination and knowledge and the value of simple delight"   Phillip Pullman

This speech by the British novelist and writer Philip Pullman describes the 'greedy ghost of market fundamentalism' that haunts the offices, meeting rooms and conference rooms of Governments all over the world. 

Pullman describes how everything that sustains the fabric of a decent society and of communities is destroyed by the onslaught of the market fundamentalists and their acolytes. He is right. A great speech.

 "And it always results in victory for one side and defeat for the other. It’s set up to do that. It’s imported the worst excesses of market fundamentalism into the one arena that used to be safe from them, the one part of our public and social life that used to be free of the commercial pressure to win or to lose, to survive or to die, which is the very essence of the religion of the market. 

Like all fundamentalists who get their clammy hands on the levers of political power, the market fanatics are going to kill off every humane, life-enhancing, generous, imaginative and decent corner of our public life. I think that little by little we’re waking up to the truth about the market fanatics and their creed. We’re coming to see that old Karl Marx had his finger on the heart of the matter when he pointed out that the market in the end will destroy everything we know, everything we thought was safe and solid. It is the most powerful solvent known to history. “Everything solid melts into air,” he said. “All that is holy is profaned.”

Market fundamentalism, this madness that’s infected the human race, is like a greedy ghost that haunts the boardrooms and council chambers and committee rooms from which the world is run these days"

Market based approaches are a threat to vulnerable people

images by Simon Bosch, courtesy of the Sydney Morning Herald

State and Federal Governments of all persuasion continue their love affair with "market based approaches" to the provision of health services and human and community services. 

These market based approaches take many forms, including privatization and contracting out of government services, competitive tendering of services to not-for- profit and for profit agencies, increasing use of for-profit providers and the private sector  to provide services, use of user pay and cost recovery principles, the application of business metrics and the imposition of corporate management models and approaches that have their origins in the for- profit business context.

But they all are predicated on the assumption that applying market principles to the delivery of health and human and community services will drive innovation, deliver greater efficiency and better quality services and save Governments money.

However, the worsening crises we face in so many areas of social and public policy are largely the result of an over reliance on market based approaches in service delivery and/or the increasing reliance on the private/corporate sector as a provider of services.

The crises in affordable housing, the collapse of corporate provider ABC Learning in childcare, the crises enveloping aged care, the problems resulting from the privatization of employment services, the costs and inaccessibility of many health, medical and dental services, the accelerating cost of public services such as water, gas and electricity, the rationing of services for children and families, are all examples of social policy problems that have been created or compounded by market based approaches.

Adele Horin's piece in the Sydney Morning Herald Sad Truth behind Closed Doors is further evidence of the dangers of relying on market based and for- profit approaches in the delivery of health and human services. Horin shows that a reliance on market based approaches is a threat to the health and well being of vulnerable people. 

Horin argues that the reliance on for- profit providers of boarding houses  to accommodate and support people with mental illness has failed to protect and improve the lives of  vulnerable people. Horin draws on the work of Sydney academic Gabriel Drake who calls the rise of licensed boarding houses in Sydney, as "the privatisation of the back wards". 

In a study of inner Sydney licensed boarding houses, Drake describes a situation where large numbers of people with only their disability in common,  live together with little to do, receive poor mental and physical health care, and have few chances to learn skills. Their pension is handed over. They can't afford a bus fare. They become highly dependent on the boarding house owner.

Horin describes how the failure by Governments to provide the funds  and support to people with mental illness who were "de-institutionalized" and moved out of large psychiatric institutions meant that they were thrown to the vagaries of the "market"

And so hundreds moved into the boarding houses which were run for profit with minimal or no accountability or monitoring. People with sometimes serious conditions, such as schizophrenia, went from the state being in charge of their welfare to a boarding house owner.

The state passed a law to license boarding houses that accommodated people with psychological or intellectual disabilities. But three Ombudsman's reports in nine years - two of them secret and the latest delivered to the Minister for Disability Services last month - testify to the failure of the responsible government department, Ageing, Disability and Home Care, to do its job of inspecting and monitoring the boarding houses properly.

A weak law, and some aggressive licensees, did not help the hapless bureaucrats in their role of protecting and improving the lives of the vulnerable residents.

It is time the state government took a serious look at boarding houses, both the licensed kind, and the unlicensed, which cater to a slightly different clientele of poor, single tenants often with alcohol and gambling addictions.

More evidence of the failure of market led reform in Australia: market reform in water threatens Australia's future

"Australian water is now effectively commoditised: allocated to whoever is willing to pay the going price"
Ian Douglas

Excellent article by Ian Douglas of Fair Water Use Australia on the failure of market approaches in national water reform.:

"This blind commitment to growth, which also suffuses the policy platforms of the major parties, is being used to justify public-private partnerships and the construction of ill-conceived and untenably costly water infrastructure, most notoriously desalination plants. Our governments appear quite comfortable entering into public-private partnerships with multinationals whose track record in terms of corporate responsibility on the global stage is, at best, in-glorious."

Douglas argues that the reliance on market based approaches and the privatization of water is incompatible with the idea of access to water as a public good and poses a serious threat to Australia's water future:

Douglas argues that despite the fact that polling indicates that at least 70% of Australians are opposed to water privatization it continues to be imposed on the nation, under the guise of water reform:

"Australian water reform was conceived in 1994 by the Council of Australian Governments; nurtured by the prevailing mantra that free-market exposure was the ultimate panacea for undercapitalised and inefficient public utilities. COAG went one giant leap further, in deciding to establish a national water market; arguing that this would direct water to its most productive use.

In the years since these sweeping changes were announced, the wisdom of applying free market principles to the management of an essential natural resource has been largely discredited by events overseas: In the water-supply sector, major corporate players have been accused and, in more than a few instances, convicted of price-gouging, anti-competitive behaviour, corrupt practice and fraud. On all continents there are moves to wrest control from private corporations. Globally, more than 90 per cent of water services are now publicly owned.

In Australia there are valid concerns that water reform is leaving crucial decisions, with respect to the “where”, “when” and “how” of water distribution, in the hands of entities whose priority is profit rather than socially and environmentally responsible water use. Questions are being raised as to why our governments have been prepared to implement these radical policies without seeking and obtaining prior electoral mandate and in the absence of adequate constitutional protection of water.

COAG healthcare reform: A perspective from WA

This week the Gillard Government finally reached an in-principle agreement with state Governments about reforms to the Australian heath care system. In this piece WA health economist Luke Slawomirski consisers the implications of the in-principle agreement. This piece first appeared in Online Opinion (here).

Health (Care) Reform

by Luke Slawomirski

The in-principle agreement struck between the Commonwealth and the States at COAG on Sunday is good. It is not great. While Australians have reason to be cautiously optimistic that health care reform is back on, it is also disappointing that it doesn’t go far enough.

More transparency

Firstly the positives. These revolve around the emphasis on transparency, accountability and efficiency. The key drivers will be

(a)    introduction of Activity Based Funding (ABF) for hospital services - paying public providers an agreed fee per care episodes such as a knee replacement,

(b)   the development of ‘efficient prices’ for episodes - a difficult, but not impossible task as some commentators have indicated

(c)    a more transparent, pooled federal funding mechanism.

Health care is one of the most opaque industries around and reforming the ‘blank cheque’ block funding approach, at least for hospitals, has to be a good thing. Increased scrutiny brought about by these measures can help reduce pernicious aspects of health care such as unwarranted variation in clinical practice and over treatment. 

Efficiency

The creation of Local Hospital Networks (LHNs) also has the potential to translate into better, more efficient services. In metropolitan and semi-rural regions, hospitals will be able to establish partnerships with nearby peers, and consolidate and rationalise services. This can not only enable economies of scale but also improve quality and safety because increases in the volume of cases for procedures and treatments increases are often accompanied by improvements in quality and decreased complications. 

Also encouraging are the provisions built in to ensure smaller, rural hospitals are not swept away by the utilitarian calculus and rationalisations of ABF.

Lack of integration

Now to the not so good parts. Setting aside the likely mess of establishing Medicare Locals and GP Super Clinics, a key problem is the non-integration of primary and tertiary care. The health care system could operate much more efficiently if there was more clinical and administrative coordination between primary providers such as GPs, pharmacist etc, and hospitals. LHNs would be much more effective if the network included at least some local primary care providers.

Much of this is a result of the funding split between the Commonwealth and state budget – and this is, unfortunately not rectified in this agreement, counter to a key recommendation of the National Health and Hospitals Reform Commission’s 2009 Report.

No prevention or promotion

It is all very hospital-centric, much to the disappointment of those who know that in the long run, the most value for money in health is in prevention and promotion. This makes all the talk of ‘efficiency’ ring a little hollow.

Implied in the agreement is the misconception that the principal driver of health, and preventer of ill-health, is health care. It is now accepted that this is not the case at all. Health care (especially tertiary care) is, at best, only a modest contributor while the dominant factors are structural and societal. Even in developed nations such as Australia, health and disease rates are predominantly influenced by things like education, literacy, income equality, social mobility and cultural factors.

There is also not much mention of mental health and nothing on addressing Indigenous health status. Both are essentially a prevention problem, whose long-term solutions reside within the sphere of the cultural, social and economic determinants, well outside the health care sector and

Of course, selling prevention is politically extremely difficult as it lays outside the reach bio-medical technology. However, Julia Gillard explained parts of the deal very well on the 7.30 Report on Monday night (14.2.2010). There is no reason why she and other political leaders cannot begin to communicate with the community the real need for and benefits of prevention.

Cost escalation and lost opportunities

Health care is extremely expensive. Its costs, as a percentage of GDP, are rising. The reasons for the escalating cost are erroneously attributed to demand side drivers including demographic change and an ageing population. This is largely incorrect. The main driver of escalating cost is actually on the supply side - the constant development of new medical and pharmaceutical technology. The rising expectations these foster in the community then serve to amplify an already rising demand.

There is no mention of addressing these in the part of the agreement on efficient cost growth. One hopes that this will be adequately tackled in the setting of efficient prices outlined in the agreement. However in its negotiations with this (admittedly pre-Gillard) government does not have a solid track record in tackling vested interests within the medical industry.

The other problem is opportunity cost – each public dollar spent on a hospital bed or PBS prescription is a dollar unspent on schools, playgrounds or other preventive expenditure.

Likewise, each interview minute spent by the PM talking about hospital beds and Super Clinics is a minute not spent communicating the value of programs and initiatives that keep people out of hospitals.

Prevention, of course, requires expenditure of financial and political capital. In a world of scarce resources (and three year electoral cycles) it is often more expedient to talk about ‘more beds and more GPs’ than tackling the root causes of disease, which are notoriously difficult to explain to the public.

In summary, the agreement reached at COAG was definitely a win for the Prime Minister. However, it is very pragmatic and there is a lot of detail left to sort out. Most importantly, it could have been a lot better. If Julia Gillard wishes to be remembered as a reformist like her political hero Nye Bevan and mentor Bob Hawke, some of the shortcomings briefly outlined above may need to be addressed before the next election.

Luke Slawomirski is a Health Economist and has worked as a clinician in Australia and overseas. The views expressed here are his own.

Phillip Pullman and the greedy ghost of market madness

"there are things above profit, things that profit knows nothing about.. things that stand for civic decency and public respect for imagination and knowledge and the value of simple delight"  Phillip Pullman

Fantastic speech here by British author Phillip Pullman on what he calls "the greedy ghost of market madness" and the social, cultural, and democratic dislocation that it causes. 

In this speech Pulman attacks the British Government for its austerity cuts which are resulting in the closure of hundreds of libraries throughout the UK and are hitting the most marginalized and disadvantaged the hardest, whilst delivering tax cuts and more public funds to the wealthy, the corporate elite and business and corporate interests.

Pulman points the finger directly at all those who advocate for the unfettered freedom of the market  and who measure the success of an endeavor or a public responsibility by the metric of profit .

"...........And it always results in victory for one side and defeat for the other. It’s set up to do that. It’s imported the worst excesses of market fundamentalism into the one arena that used to be safe from them, the one part of our public and social life that used to be free of the commercial pressure to win or to lose, to survive or to die, which is the very essence of the religion of the market. Like all fundamentalists who get their clammy hands on the levers of political power, the market fanatics are going to kill off every humane, life-enhancing, generous, imaginative and decent corner of our public life. I think that little by little we’re waking up to the truth about the market fanatics and their creed. We’re coming to see that old Karl Marx had his finger on the heart of the matter when he pointed out that the market in the end will destroy everything we know, everything we thought was safe and solid. It is the most powerful solvent known to history. “Everything solid melts into air,” he said. “All that is holy is profaned.”

Market fundamentalism, this madness that’s infected the human race, is like a greedy ghost that haunts the boardrooms and council chambers and committee rooms from which the world is run these days.

So decisions are made for the wrong reasons. The human joy and pleasure goes out of it; books are published not because they’re good books but because they’re just like the books that are in the bestseller lists now, because the only measure is profit.

The greedy ghost is everywhere. That office block isn’t making enough money: tear it down and put up a block of flats. The flats aren’t making enough money: rip them apart and put up a hotel. The hotel isn’t making enough money: smash it to the ground and put up a multiplex cinema. The cinema isn’t making enough money: demolish it and put up a shopping mall.

"...............The greedy ghost understands profit all right. But that’s all he understands. What he doesn’t understand is enterprises that don’t make a profit, because they’re not set up to do that but to do something different. He doesn’t understand libraries at all, for instance. That branch – how much money did it make last year? Why aren’t you charging higher fines? Why don’t you charge for library cards? Why don’t you charge for every catalogue search? Reserving books – you should charge a lot more for that. Those bookshelves over there – what’s on them? Philosophy? And how many people looked at them last week? Three? Empty those shelves and fill them up with celebrity memoirs.

That’s all the greedy ghost thinks libraries are for.

Now of course I’m not blaming Oxfordshire County Council for the entire collapse of social decency throughout the western world. Its powers are large, its authority is awe-inspiring, but not that awe-inspiring. The blame for our current situation goes further back and higher up even than the majestic office currently held by Mr Keith Mitchell. It even goes higher up and further back than the substantial, not to say monumental, figure of Eric Pickles. To find the true origin you’d have to go on a long journey back in time, and you might do worse than to make your first stop in Chicago, the home of the famous Chicago School of Economics, which argued for the unfettered freedom of the market and as little government as possible.

Crisis in WA hospitals

This op ed piece by Professor Gavin Mooney appeared in the West Australian on Friday September 24th in response to ongoing problems in the WA health care system, highlighted by a recent crises involving ambulance ramping at the city's major public hospitals.

Ambulance ramping

By Gavin Mooney

The accounts of the ramping of ambulances at the major Perth hospitals last week are worrying and one feels very much for the patients involved and their families. Something clearly is going wrong and, while last week was particularly bad, these events do occur with some regularity.

 But let’s stop and think this through a bit more. There will never be a health care system in WA or anywhere else that can meet all demands and needs for health care. No society can ever achieve that. If we tried to, it would be so expensive and we would end up with very poor educational, transport and justice systems. Or we would have to cut back markedly on private consumption as we paid more and more in taxes. Or, if we went further down the private road, we’d be spending enormous amounts on private health insurance.

Taking public and private together, as a country or as a state, do we spend enough on health care? Well in comparison with other countries we seem to be getting it about right – although out of the total we do spend rather a high proportion on hospitals.

But then of course we need hospitals!  My questions however are these.

First have we got the right mix of types of hospitals? And second have we got the right mix of types of health services? The Reid Review of 2004 which is the most recent assessment of the WA health service indicated that 80% of patients in our big teaching hospitals did not need to be there. That is a staggering figure, especially as these are very expensive places to be. 

There is a ‘law’ in health policy that says ‘a built bed is a filled bed’ meaning that if we create more beds they automatically get used. That 80% figure clearly suggests an oversupply of beds in our big hospitals. Many patients could be treated just as well but at less cost in other hospitals. Rather than building the Fiona Stanley Hospital what we should be doing is expanding other, cheaper hospitals. 

But maybe we need to increase services outside of hospitals – GP and community services, preventive services. It is of note that in the “Citizens’ Juries” (of randomly selected citizens brought together and given good information) in this state that I have facilitated, when asked about their priorities, not one has wanted more hospital beds. Indeed to pay for the priorities that they as citizens want – prevention, mental illness, greater equity, community care - some juries have suggested closing hospital beds!

The push for more and more beds is simply not working. I have been in the west for 10 years and over that period we have pumped more and more money into these teaching hospitals and we still have the ramping of last week. These hospitals are ‘sick’ but the ‘treatment’ over the last decade is not working. We need more ‘investigations’ so that we can up with a better ‘diagnosis’. 

What to do? Well the first thing - and I have asked for this repeatedly – is to conduct a detailed investigation into our teaching hospitals. Where is the money going? What is driving costs? Can the services be provided as well but at less cost i.e. more efficiently? That sort of detailed study was not done by Reid and it has not been done since. We cannot make sense of any of this until that study is done.

The second thing is to put in place more policies to keep people in the community – bolster prevention and invest in programs to keep people out of hospital. Most people want to live as long as they can in their own homes. Let’s respect that. And it is cheaper. 

And third let’s find out what the people of WA want from our health services – and they are our health services, not the doctors’, not the politicians’, not the Health Department’s. They are ours, the citizens’. Let’s have a series of these “Citizens’ Juries”, say ten across the state, so that critically informed citizens can have a genuine say in the future of the WA health service.

Early last month I did one of these Citizens’ Juries in the ACT at the request of the Minister of Health in the ACT, with fascinating results for their services.

Dr Hames, Mr Snowball, I make this plea. In response to ambulance ramping, instead of pouring more and more money into these expensive hospitals, let’s have an investigation into how the vast sums of money they are currently getting current are being used. And rather than assume that supplying more and more beds is the answer, let’s work on reducing demand.  And finally will you please fund a program of Citizens’ Juries across the state so that you can learn what we as citizens want from our WA health services?

Professor Gavin Mooney, Health Economist and Co-convenor, WA Social Justice Network 

Market illogic and the manufacture of "defecit hysteria"

Three hundred US economists have warned that current US economic policies risk plunging the US into a deep depression, unseen since the 1930's. 

As the economic circumstances of ordinary Americans worsen, the economists are warning against "deficit hysteria", the contemporary obsession with short term government deficits which lead governments down the path of severe austerity measures and massive reductions in public spending. 

The economists argue that defecit hysteria is a manufactured crises and is being used as cover for other agendas, including more privatization and slashing of social security and social spending.

The economists stress the need for increased public investment to thrust the US economy back into recovery.

The economic crises confronting the US is borne out by recent data which shows that more Americans are poor than ever before (since data was collected). Unemployment and job losses continues to rise and there are now 43.6 million Americans who are poor, as measured by the US Census Bureau. 


Juxtapose this information with the graph below about US income growth (posted before) and we can begin to understand what David Harvey means by accumulation by dispossession, the process whereby the rich, the wealthy and upper middle class gain greater wealth and power at the expense of the rest.

For an an alternative perspective on economic policy: read Billy blog

Bill Mitchell's blog Billy Blog-alternative economic thinking is an excellent site to read about the myths and propaganda promulgated by mainstream economists, economic commentators in the media and most politicains and political commentators. 

As a non-economist interested in economic matters I greatly appreciate Billy blog's sustained critique of neoliberal and neo conservative market economics.

Reading one of his latest posts about the standard myths that dominate most neoliberal economic thinking I found this:

"The overwhelming sentiment of the business community and the conservative nature of our political system (and its participants) leads to a largely anti-government swell of opinion which is continually reinforced by the media – the “debt-deficit hysterics”. The neo-liberal expression of this over the last three decades has overwhelmingly imposed massive political restrictions on the ability of the government to use its fiscal policy powers under a fiat monetary system to ensure we have full employment.

We now accept very high unemployment and underemployment rates as a more or less permanent feature of our economic lives because of the political constraints imposed on government"

Why we need more public investment in public services and public infrastructure

Interesting to read a recent US study that found that the most effective options for creating jobs and building a prosperous regional and state economy is for governments to spend and invest more in public services and public infrastructure.

Disputing the idea promulgated by pro-business and pro-market politicians and advocates that funding public services and economic development are competing interests the study found that:

" The tax cuts and business subsidies approach to economic development will do little to create jobs in the short run and is not the most effective to generating growth over the long term".

The study found that investing public funds in public services, such as education and health and in public assets and public infrastructure is the best approach for state and local development, and raises gross state product, expands productive capacity, increases employment and raises personal income.

The study found that providing incentives to corporations and business such as tax breaks, public subsidies, employment subsidies and other forms of business incentives are not effective and are often counterproductive because they deplete resources that could be spent on education and investments in public services and public infrastructure. 


Strategies that shift resources and assets from the public sector to the private sector- privatization, marketization and corporatization- reduce costs and increase corporate and business profits but are not effective in terms of state and local development and building a prosperous state and regional economy.

The study concludes:

Instead of trying to lure firms with deals and lower corporate taxes, an approach to economic development that builds the skills of the current and future workforce, improves the physical infrastructure of regions, and makes communities more attractive places for families and firms represents a more effective use of a state’s scarce resources.