Privatization: a Contested Concept

The Buchmann Faculty of Law, Trubowicz Building, TAU

Sonia and Eduard Kossoy Conference Room (Room 307)

The conference sessions will be held in English

Papers

 

Abstracts

 

 

Criminal Punishment and the Right to Rule

Malcolm Thorburn

 

Criminal punishment has long been the preserve of state officials. In recent years, Alon Harel has presented a principled, normative argument for why this must be so. In this essay, I argue that the principled reasons for why only the state has the standing to administer criminal punishment run even deeper than Harel suggests. It lies in the very nature of crime and punishment. Crime gives rise to a right in the state to punish because it is a wrong against the state’s exclusive right to make the law - its right to rule. Punishment serves to reassert the state’s exclusive right in the face of the offender’s wrong - and this is something that by its very nature can only be done by the state.

 

 

 

Privatizatiom and the Problem of Delegated Activity

Chiara Cordelli

Building on philosophical theories of collective action, I show that democratic policy-making is an intentional collective action type. Like the game of tic-tac-toe is such that it can only be played *together* by participants in the game, similarly, the nature of democratic policymaking (as opposed to, say, issuing mere statements of value) is such that it can only be arrived at by a community of law-makers, administrators, and citizens who act together in making those decisions. Acting together requires meeting some specific conditions of commitment to a joint purpose, mutual responsiveness and mutual support. I argue that private actors, due to some distinctive structural, positional and organizational features, often fail to meet such conditions and thus to act qua an integral part of the relevant decision-making community. Although their decisions may be identical, in form and content, to the decisions made by public officials or agencies, they lack the quality of democratic policymaking that the latter possess, and the legitimacy that comes with this quality. They thus remain unilateral determinations of particular men and women.    

 
 
 

Justice and the Market

Shai Agmon and Assaf Sharon

 

While the pernicious effects of certain markets have been widely dis- cussed, the issue of legal representation is conspicuously absent from the burgeoning philosophical literature on the moral limits of markets. Ana- lyzing the market of legal representation, the paper devises a novel argu- ment for limiting markets, which identifies a distinct category of goods that should not be commodified––goods whose social value depends on their equal distribution. Equality is constitutive to justice, hence equal access to legal resources––or equal legal opportunity––is a requirement of justice. This entails, we argue, that equal access to legal representation is  a requirement of justice, at least in adversarial legal systems. The market of legal representation allows economic disparities to translate into inequalities in legal opportunity and is therefore incompatible with justice.

 

 

 

A public Comception of Law

Avihay Dorfman & Alon Harel 

 

What is law’s relation to morality?  This basic question has figured prominently in legal and political philosophy for centuries.  It mostly receives a structurally similar answer: That the key to identify law’s relation to morality lies in the content of legal rules and institutions.  For instance, it is widely accepted that law purports to render the demands of morality more determinate; and another familiar view is that law just is the institutional instantiation of the demands of morality.  Against this backdrop, we argue, negatively, that content-based accounts of the connection between law and morality mischaracterize the nature of such connection.  Affirmatively, we argue that law is at its core a public point of view of morality—that is, a collective determination of what we take morality to demand, as oppose to what morality demands.   We further elaborate on the normative implication that follows from identifying the connection between law and morality in terms of legal standing, rather than legal content: We argue that some forms of hierarchy are essential to any legal order committed to respecting human dignity.

 

 

 

Time Horizons and Market Boundaries

Avner Offer

 

Since the 1980s privatisation and outsourcing have been promoted on grounds of efficiency and fiscal convenience. The argument here is that the appropriate choice between business and public enterprise is determined by the interaction between two time horizons, a financial time horizon and a project time horizon. The prevailing interest rate defines a credit time horizon. The payback period  appraisal  method defines a unique temporal outer bound for private sector break-even. Net present value break-evens (and other forms of credit) are always shorter. Any project which has a break-even longer the payback period cannot be funded by business alone. Long-term projects encounter many dimensions of uncertainty and attempt to control it by means of rigid contracts, which also lead to inferior outcomes. This analysis is positive and accounts for historical patterns of enterprise. It also provides normative guidance.  Public-private partnerships for infrastructure development are intended to overcome credit time boundaries and were taken up widely. Their implementation has given rise to inefficiency and corruption and they are currently in decline. Another method of transcending boundaries is the ‘franchise’ i.e. protection from uncertainty provided by social and government agencies. This allows longer credit break-evens, but at a loss of competitive efficiency. It is also prone to corruption.  The franchise provides social leverage for imposing corporate compliance with the public good. The time-horizon model undermines the standard argument for market superiority. It turns Hayek on his head: it is financial markets that require certainty, whereas the task of social and public agencies is to manage in its absence.

 

 

 

Sovereignty and Diamonds in Southern Africa, 1908-1920

Steven Press

 

In 1908, Germans discovered what was then the richest diamond field in history. The backdrop for this find was the Namib desert in the Protectorate of Southwest Africa, the very desert through which Germany had begun its fateful colonization of the Herero and Nama peoples in the 1880s. From the moment of discovery, the Namib diamonds worked to create major uncertainty. These tiny stones had the power to create scandal in the German parliament, or to strike fear in the boardrooms of London. They sparked the imagination of fortune-seekers worldwide. They even inspired a host of cultural depictions, from the massively popular works of Hans Grimm to long-since-forgotten penny dreadfuls.

     Anyone could see how the Namib had enormous potential. The problem was that the place was no conventional open-pit mine, but a gigantic sandbox. Diamonds in the Southern Namib could be picked up by hand easily in the early days – in fact, they still can. Ownership and control, therefore, were paramount concerns in need of decisive resolution. The problem was figuring out who owned the Namib in 1908, de jure, and who would control it, de facto. In the event, control of the diamonds was heavily contested in Europe in the run-up to World War I, not just by bankers and by colonial planners, but by governments, the powerful De Beers Corporation, and such Americans as future president Herbert Hoover. Plans eventually emerged for Germany to form a new partnership with De Beers: an international cartel that featured not just corporations but, for the first time, a state and private parties. Nor was this turbulence confined to peacetime: From 1914 to 1918, the Namib diamonds proved an essential element in British, American, and German war planning, with stakes high enough to affect the stability of the German mark and threaten the industrial plants of both the Triple Entente and Alliance.

     Throughout this period, the diamonds raised unsettling legal issues. Some concerned German colonial authority: the dubious treaties underpinning its international legal position; Germany’s erratic commitment to development; and indigenous labourers’ lack of access to safeguards against abuse. Other doubts related to colonialism more broadly, including the winding-down of late-nineteenth-century chartered-company governments that had irretrievably blurred the lines between private and public spheres – that is, between dominium and imperium.

 

 

 

The Privatization of Regulation

Yael Kariv-Teitelbaum

 

 In recent decades, Western liberal democracies have gradually entered a new era of governance (“New Governance”), in which hybrid and private become an important stakeholders and active participants of the expanding governmental process. Many scholars perceive the integration of non-governmental entities into governance as a positive development that increases governmental efficiency, reinforces political legitimacy and empowers civil democracy. However, the mirror image of this portrayal raises concerns about fragmentation, dismantlement of authority, and the loss or change of the state`s responsibility.

This paper will address a relatively new phenomenon that can be seen as a rather extreme example of integrating private entities into the act of governance: the privatization of the power to regulate. In this process, the government not only cooperates with private entities, but practically transfers the operation of the power to regulate into the hands of private bodies, thus privatizing regulation. The most common form of this phenomenon nowadays is the privatization of the power to supervise, monitor and control using mainly mechanisms of certification, accreditation and auditing.

The privatization of the power to regulate seemingly stands in contrast to the original rational of privatization processes. Traditionally, transferring executive roles to the private sector through privatization was perceived as a tool to decrease the public sector and allow it to focus on and specialize mainly in regulatory and management duties. Regulation was perceived both as a solution to many of the problems privatizations raise and as the central function that will remain in the hands of the state. The privatization of regulatory powers is therefore a new and different "generation" of privatization that requires a closer look and new justifications.

In this paper, I will explore this new generation of privatization and attempt to evaluate how privatizing supervisory powers affects the regulatory expertise. Transferring to private bodies the power to execute on behalf of the regulator the day-to-day “field regulation” involving most of the face-to-face interaction with the regulatees, thus “cutting off” the regulator’s supervisory arm, might lead to a significant dependence on those bodies. The more the regulator depends on the privatized bodies in designing rules and setting priorities, rises a true concern regarding the state`s ability to perform one of its last remaining key roles – to regulate.

 

 

 

The Regulation of  Language 

Yehonatan Givati

 

Can language be centrally planned and controlled? Friedrich Hayek considered language the archetypal example of spontaneous order, yet many countries adopt a planned order approach to language, attempt- ing to centrally plan and control it through language academies. I collect original data on the regulation of language across countries, and show that countries that adopt a planned order approach to lan- guage, also do so in their law, and similarly rely on a planned order approach in their economy. Countries that adopt a spontaneous order approach to language, also do so in their law, and similarly rely on a spontaneous order approach in their economy. This is consistent with the idea that these approaches are driven by an underlying cultural attitude towards the two types of order.

 

 

 

Neoliberal Socialism

Jon Michaels

 

Please note this abstract envisions a project far broader than the essay I’ll circulate for the conference.  In the Spring, I’ll either circulate an essay-length overview of the project or an in-depth treatment of one particular part of the broader project.

     Despite decades of bipartisan assurances that the era of big government is over—and despite decades of bipartisan attacks on bureaucracy—the American welfare state chugs along.  The federal government still provides most of the goods and services that it offered during its heyday, a period that roughly spans the New Deal through the early 1970s. If anything, the feds provide an even broader menu of goods and services today than ever before.  The same is largely true with respect to the states, counties, and municipalities.   

     How do we square the rhetoric with the reality?  Half the story is privatization.  The famous (or infamous) Reagan Revolution entailed a deft pivot.  Reagan’s originally promised deregulatory movement floundered, stymied by forceful opponents and even erstwhile but faint-hearted allies, each of whom was unwilling to forgo at least some redistributive and regulatory programs.  So Reagan indulged the American people’s cognitive dissonance.  Because we were antagonistic to, yet entirely dependent on, a rangy welfare state, a truly deregulatory solution was not an option.  Instead, Reagan—and those of both parties who succeeded him—targeted the trappings of big government (principally bureaucracy) while preserving the substance of the cherished programs. 

     Hence wholesale privatization, which (as the term is used in the United States) includes (a) the contracting out of government services, thereby technically—but only technically—shrinking the size of government and changing the identities of those who serve us; and (b) the marketization of the bureaucracy, whereby tenured civil servants are converted into at-will employees, more in keeping with who we’d find in the private sector.  For many, these strains of privatization allow us to have our cake and eat it too—we can embraces practices and principles of the much-vaunted Market while retaining the cherished programs of the New Deal and Great Society.

     The other half of the story is similarly tied to Americans’ love-hate relationship with big government.  Just because we have contractors and at-will employees staff government programs it does not follow that the substantive content of regulatory and public-benefits programs will necessarily change.  Indeed, privatization may well enable government to be bigger and more intrusive.  (I’ve argued as much elsewhere.)  So how do we cling to government while also pricing and allocating government goods and services more in keeping with what we’d expect in the private sector?  The answer this project suggests is a certain flavor of government market participation: neoliberal socialism.

 

 

 

Privatizing Procedure

Talia Fisher

 

     The manner in which procedural law is conceptualized, and in which it operates, has undergone a significant transition since the second half of the 19th century. Evidentiary and procedural rules have shifted from acting as mandatory safeguards of public values to default rules and bargaining chips, within the private hands of the litigating parties. The public model of both civil and criminal procedure, which places the procedural and evidentiary aspects of the judicial process beyond the reach of the litigating parties, has- over the decades- given way to a private contractual paradigm, which allows for customization of the procedural and evidentiary landscape of trial. Courts are exhibiting a growing willingness to enforce choice of procedure rule agreements - ranging from evidence admissibility stipulations through burden of proof agreements, and culminating with waiver of the right to trial by jury. 

     The purpose of the proposed article is to normatively assess this transition-- to delineate the borders of party control over the procedural contours of civil and criminal trials, and over the negotiated allocation of risks and costs of legal fact-finding. The practical importance of this issue is rooted in the systematic and growing incidence of contractual ordering of these arenas, whether in the form of de-facto deviations from the prevailing procedural regimes under the contemporaneous objection rule (hereinafter: “procedural waivers”) or in the form of explicit agreements by litigating parties to customize the rules of procedure in the shadow of trial (hereinafter “procedural agreements”), or through  pre-dispute contractual limitations regarding the means of proof in the event a dispute arises (hereinafter “ex ante procedural agreements).

     The normative importance of this issue stems from the fact that the phenomenon of procedural agreements reaches down to the roots of the adversarial method, aimed at fulfilling the public functions of trial- primarily the unraveling of truth-  by investing control over it in the hands of private parties. Such agreements also challenge the borderline between the public and the private in the judicial process, undermining the traditional view of due process: Thus, traditionally the due process discourse has focused on preservation of the private rights of the litigating parties, taking into account the latent risks presented by public interests (e.g., deterrence or crime control). Customization of procedure challenges the relationship between the private interests of the litigants and those of the broader society from the opposite direction-- it raises questions concerning the protection of the societal and institutional values, underlying the judicial process, when pitted against the private interests of litigating parties.

     The purpose of the proposed article is to provide a taxonomy and normative assessment of contractual ordering of the evidentiary arena, and to present several derivative conclusions concerning the private-public dimensions of trial and the organizing logic of the adversarial system.

 

 

 

Delegation and the Incoherence or Irrelevance of Private Status

Alexander Volokh

 

It is a common view that governments should not delegate coercive power to private actors. This view has sometimes led courts to conclude that private delegations are inherently unconstitutional, or at least that they should be judged by a higher standard than public delegations.

     However, courts have generally failed to articulate a sound distinction between “public” and “private”, or explain why such a distinction is normatively relevant. Often courts’ statements that a particular actor is “private” (and therefore an invalid delegate) are purely conclusory. Courts also often define “private” by factors such as the presence of self-interest or the absence of particular public accountability mechanisms — factors that can equally apply to undisputedly public-sector actors.

     This paper analyzes several such cases in which delegations were invalidated because the delegate was supposedly private, including: the Academic Center of Law and Business case, in which the Israeli Supreme Court invalidated a prison-privatization statute; the Texas Boll Weevil Eradication Foundation case, in which the Texas Supreme Court invalidated a delegation to an agency with the power to destroy farmers’ cotton crops that it determined were diseased; and the Association of American Railroads case, in which a U.S. federal appellate court invalidated a delegation of coercive power to the federally created Amtrak railroad corporation.

     The conclusion of this paper is that the public-private distinction is remarkably difficult to define or apply — and that the failures of recent efforts suggests that the public-private distinction is not in itself relevant to the validity of delegations.

 

 

 

Do Welfare States Enjoy the ‘Freedom to Fund’? On Conditional Cash Transfers and Political Speech

Hila Shamir and Ori Aronson

 

Can the state condition financial support for (private) artistic speech upon the content of the speech? This question has been debated in Israel over the past several years, as the government has begun to use its cash transfer mechanisms to either penalize or incentivize political speech in ideologically controversial contexts. While existing legal categories that pertain to this kind of strategy are lacking in accuracy and robustness—namely, doctrines derived from the right of free speech seem incapable of effectively and consistently regulating it—we argue that the law and scholarship on conditional cash transfers in the welfare state can be instructive in developing a normative framework for this hot button issue. The article thus locates cash-transfer strategies pertaining to political speech in a broader typology of welfare state conditionalities, and derives from this re-contextualization a normative evaluation metric, which is premised primarily on the extent of the state’s role in sustaining the field of speech: the more state funding is essential for the thriving of the field (theater, cinema, etc.), the less should it be allowed to be used to affect the contents of the speech it funds. This framework leads to a proportionality-based assessment of different methods of funding-based speech-incentivization (e.g., grants vs. withholding, exclusion vs. limitation), and is also discussed in relation to other normative bases for regulation of state funding—including positive rights, minority rights, and pluralism.

 

 

 

 

 

 

 

 

Tel Aviv University makes every effort to respect copyright. If you own copyright to the content contained
here and / or the use of such content is in your opinion infringing Contact the referral system >>