Elizabeth I and the Limits of Privatization

Abstract

Scholars and practitioners of public administration are familiar with large body of recent research on privatization of governmental functions. As noted by Wallin (1997, 12), privatization arrangements are entered into with expectation of improved services and lower costs. However, methodological questions remain about whether either of these outcomes is actually achieved. Privatization is not a new concept. Some of information is over four centuries old. For example, in growing conflict with Spain during late 16th century, Queen Elizabeth came to rely increasingly on private sector for naval warfare and colonization. Most private providers (called Privateers) were involved in both of these functions. The history of this relationship provides insight into perils of privatization, especially when privatized functions are not carefully planned, implemented, and monitored. What Prompts Governments to Privatize? According to McCaffrey (1992, 61), a significant impetus for privatization in 16th century a lack of money in treasury along with an inherited deficit. The queen obsessed with balancing budget and getting out of debt. Wherever possible, McCaffrey says (1992, 66), Particularly in overseas naval expeditions, there an effort to `privatize' costs by luring private investment in hope of returns from prizes or booty. Can Profit Motive of Private Providers Impede Achievement of Public Policy Goals? Privatization in 16th century accompanied by several types of problems. Private providers often employed unskilled workers (Black, 1936, 357). Such employees were cheaper than skilled sort and readily available in virtually any port of call. Employment of unskilled workers attractive because it held down costs; however, a large percentage of these workers were incompetent. Another problem encountered with privatization privateers' interest in loot. A generally accepted reason for failure of first colony at Roanoke is that Grenville's expedition delayed and depleted on way out by taking and manning home various prizes [leaving only a skeleton force available to remain at Roanoke]. He probably could have left a more substantial force had he not wished to cruise for further spoil on return (Andrews, 1985, 11). Privateering not only distracted private fleet from colonization, but apparently also distorted queen's foreign policy objectives. Andrews (1985, 8) says that during Sir Humphrey Gilbert's voyage of 1578, about half of his force made no attempt to cross Atlantic [as intended), but went cruising for whatever they could take, which meant in practice French shipping as well as Spanish property. McCaffrey (1981) suggests that privateers' rapacity may have helped draw queen into a war that she might have preferred to avoid. Can Privatization Obstruct Needed Investment in Public-Sector Assets and Programs? The diversion of official time and attention to privateering, an ineffective way to wage war on its own, seems to have reduced ability of Royal Navy to prepare for and fight a war. Privateers sometimes attacked needed allies, impeded individual naval expeditions, and generally held back the development of navy as a strategic weapon (Andrews, 1985, 17). Is There Potential for Public Officials to Have Conflicts of Interest in Regulating Providers? Because they were believed to have necessary business expertise, pirates were often converted into Privateers and even into government officials. Francis Drake and Martin Frobisher had been practicing pirates before Crown employed them (and apparently during their employment as well). The father of Walter Raleigh was repeatedly in trouble with Admiralty Court for piracy out of Exmouth; and duly achieved appropriate office of deputy vice-admiral of Devon (Andrews, 1985, 8). …