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Privatisation of Governance: A multi-stakeholder slippery slope

CIVICUS’ 2014 State of Civil Society Report which draws on inputs from some of the world’s leading civil society voices, warns about the risks of global governance being determined by influential private interests. Large transnational corporations are transcending the regulation attempts of national jurisdictions. Many of the worst acts of repression against civil society are against activists seeking environmental justice and protection of land rights, who put themselves in opposition to powerful construction, agribusiness and extractive industries benefitting from state largesse.

Resentment against the forces of market fundamentalism is also leading to deep-seated frustration at the overlap and collusion between economic and political elites. In almost every country of the world we see a profusion of politicians with extensive business interests and the economically powerful moving into politics as a way of protecting their wealth. Political decisions taken to benefit economic elite interests are fuelling protests around the world as evidenced in Brazil, Turkey and South Africa last year. Compared to their own lack of voice, protesters in these countries saw private sector interests enjoy privileged access to decision-makers. They saw states abdicating their responsibilities by outsourcing basic services and selling elements of the public sphere to private interests, diluting accountability as a consequence.

As the contributions to CIVICUS’ report reveal, big businesses are increasingly eyeing the public sector as an avenue for profit making. Notably, ‘multi-stakeholder partnerships’ is becoming the new phrase of choice to disguise increasing private involvement in development activities. A common argument used is that the public sector is unwieldy, therefore in need of being made effective and efficient through privatisation. This line of thinking suffers from some severe defects.

First, the notion of making the public sector fit for purpose through better governance mechanisms is discarded without being properly tested. The ingrained assumption that the private sector brings greater efficiency needs to be scrutinised more taking into account the vast profit margins of private enterprises which are passed on to the public.

Second, moving public services into the private sphere reduces the potential for accountability to be exercised by citizens. Sections of the public sphere are thus screened from direct scrutiny while increasing the potential for corruption. Third, partnership in delivery breeds elite influence over policy which ultimately works to the detriment of majority interests. The potential for insider access that allows private partners direct access to policy makers is a recipe for nepotism in society.

Finally, the on-going rapid shrinkage of the public sector to accommodate private interests amounts to an abdication of state responsibility and indeed betrayal of the social contract between citizens and the state. Taxes and other forms of revenue are paid to governments in the expectation that quality essential services will be provided to citizens at reasonable cost. When these are outsourced and allowed to become another avenue for profit by elite interests, there is bound to be public discontent.

Mandeep Tiwana is the Head of Policy and Research at the global civil society alliance, CIVICUS. This blog is based on an article previously published in Open Democracy.

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