Why States Do or Do Not Privatize: Cross-Class Coalitions in the Public Sector

abstract: When do public services privatize, and when do they remain in the public's hands? The authors argue that one explanation lies in a counterintuitive coalition: labor and management. Unlike industrial relations in the private sector, those in the public sector are not necessarily antagonistic. When the interests of public sector workers and managers—the latter defined as those with supervisory responsibilities—are aligned, public services are less likely to privatize. Conversely, when the interests of workers and managers are not aligned, privatization is more likely. To test and substantiate this theory, the authors deploy a most-similar systems comparison of three case studies, focusing on efforts to privatize public passenger rail in the United States, United Kingdom, and New Zealand at the onset of the privatization era in the 1980s and 1990s. This article hence contributes to the study of state privatization, cross-class coalitions, and public sector reform in affluent economies.