Direct Government Investment: Perverse Privatization or New Tool of Government?

Abstract

AbstractIn recent years, public administration scholars have called attention to a blurring of the boundaries between the public and private sectors. However, little attention has been focused on the administration of public programs that seek to impact private markets through direct government investment in private firms. The direct government investment approach is a new tool of government that has been applied in several countries and at multiple levels of government. Through an analytic mix of theory and attention to practice, this article leverages a deep case analysis of the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program to propose and utilize criteria for examining justifiable rationales for direct government investment, areas of administrative capacity necessary to manage such investments, and potential pitfalls of this new tool of government.