ARGUMENTS IN favor of privatization pose what are referred to here as Rainey’s conundrum (2003). Rainey notes that one of the key rationales offered for privatization is that the public sector is poorly managed. Ironically, however, successful privatization requires outstanding publicsector management. In particular, the move from a centralized command-and-control style bureaucratic structure to contract-based program delivery demands a sophisticated set of managerial skills and structural changes that would challenge the most effi cient and effective organization regardless of sector affi liation (Cooper 2003). The managerial requirements of privatization for midlevel managers—the focus of this article—are particularly signifi cant. With respect to contracting out, managers can be involved in preparing requests for proposals, reviewing submitted proposals, providing input into contracting decisions, crafting contract language, and ushering contracts through internal approval processes (Seidenstat 1999, 240; Rusten 1999, 190). Once contracts have been signed, midlevel managers may be the primary overseers of contractors, providing direction, monitoring contractual tasks, and ensuring compliance with contract terms (Seidenstat 1999, 240). While not a technical step in contracting out, building relationships with contractors is a necessary step toward facilitating effective alternative service delivery (Cooper 2003, 101). Despite their signifi cant contribution to privatization processes, midlevel managers have largely been ignored in studies of privatization’s stakeholders. Rather, more attention has been devoted to the privatization responses of citizens, political leaders, city managers, and state agency directors. Studies examining citizen attitudes toward privatization have argued the importance of public opinion to political support for privatization and the strategic value of such information (Durant and Legge 2002; Thompson and Elling 2000). The attitudes of state legislators toward contracting out have been justifi ed by the importance of legislative support to administrators in designing alternative service-delivery systems (Becker and Mackelprang 1990). Studies of city managers have focused on the relationship between their government reform values and the level of reform activity in their cities (Moon and deLeon 2001), as well as the number of reform recommendations they make to city councils (Kearney, Feldman, and Scavo 2000; Kearney and Scavo 2001). Finally, state-level reinvention efforts have been studied as a function of Managerial Perceptions of Privatization: Evidence from a State Department of Transportation
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