Policy impact analysis of privatizing public services: The case of wastewater treatment in Indianapolis (Indiana)

The wave of privatization in the late 1970s spurred local government policy makers to deal with fiscal and economic pressures created by limited local resources, decreased federal grants, and a spectrum of political aspirations. They reconsidered alternative service delivery arrangements—whether local governments should remain as direct service suppliers through in-house service delivery, or service brokers and monitors through managed contracts with outside vendors.; Various scholars and practitioners have investigated empirically whether privatizing public services can succeed at the local government level. However, existing studies are often inconclusive and ideologically biased. A more systematic and accurate analysis is needed to group impacts of privatization on public services. Therefore, this should be explored in a meticulous case study supported by rich, in-depth real-life qualitative research together with strong quantitative analytical techniques, in order to clarify the confusion/illusion both in the intensity of the theory-building process and practice of public service delivery arrangements.; This study introduces the rationale for employing the Quasi-Experimental (Q-E) methods, including Interrupted Time Series analysis (ITS). Methodological emphasis is placed on the significance of integrating qualitative and quantitative analytical tools.; This study focuses on the policy intervention of privatization in Indianapolis, Indiana, Advanced Wastewater Treatment (AWT) facilities. Cost of Operation and Management (O&M) of AWT before and after the policy intervention; and the quality of wastewater treated before and after the policy intervention have been longitudinally analyzed.; Special emphasis is given to the significance of capital improvement costs because of its decisive power to affect the findings of prior research on privatization.; This study reviews two rival hypotheses about the effects of privatization: (i) capital improvements rather than privatization affect desired outcomes; and (ii) precipitation affects desired outcomes.; In sum, ten essential policy implications have been developed to further clarify misconceptions about privatization practice. Privatization as policy intervention did not result in sudden changes in O&M variables. The statistically delayed impact of privatization has been ruled out through testing rival hypotheses, especially capital improvement costs. The quality of wastewater treatment is improved over time but threats to validity still exist.