WE’VE heard many times that we should privatize CUC in order to save money and improve efficiency. Obviously this makes sense, in some instances. Privatization is one way of looking at solving CUC’s woes. But just as obviously, privatization is not the solution. Those who advocate it on ideological grounds because they believe business is always superior to government are selling CNMI residents coconut oil.
Privatization is simply the wrong starting point for discussion of the role of government. Services can be contracted out or turned over to the private sector. But governance cannot. We can privatize discrete steering functions, but not the overall process of governance. If we did, we would have no mechanism by which to make collective decisions, no way to set the rules of the marketplace and no means to enforce rules of behavior. We would lose all sense of equity and altruism: services that could not generate a profit, whether housing for the homeless or healthcare for the poor, would barely exist.
The third sector, the non for profit organizations, could never shoulder the entire load. Business does some things better than government, but government does some things better than business. The public sector tends to be better, for instance, at policy management, regulation, ensuring equity, preventing discrimination, ensuring continuity and stability of services and ensuring social cohesion through mixing of races and classes for example in public schools. Business tends to be better at economic task, innovating, replicating successful experiments, adapting to change, abandoning unsuccessful or obsolete activities and performing complex technical tasks. The third sector tends to be best at performing tasks that generate little or no profit, demand compassion and commitment to individuals, require extensive trust on the part of customers or clients. Likewise, private markets handle many tasks better than public administrations but not all tasks. Private university would work extremely well in the CNMI if allowed but without our Northern Marianas College, many of the CNMI residents would be denied the opportunity to go to college. Our public school system both in the elementary and secondary schools has many problems, but if we turned all education over to the private marketplace, many of the children could not even afford elementary school.
Those who support privatization in all cases because they dislike government are as misguided as those who oppose it in all cases because they dislike business. The truth is that the ownership of a good or service whether public or private is far less important than the dynamics of the market or institution that produces it. Some private markets function beautifully; others do not. The determining factors have to do with incentives that drive those within the system. Are they motivated to excel? Are they accountable for their results? Are they free from overly restrictive rules and regulations? Is authority decentralized enough to permit adequate flexibility? Questions like these are important ones, not whether the activity is private or public. Often when governments privatize an activity, contracting with a private company to pick up the garbage or clean office buildings for example, the end results is that the cost and inefficiency grow worse.
It make sense to put the CUC in private hands (whether for profit or nonprofit) if by doing so the CNMI can be more effective, efficient, equitable and accountable to the people. But we should not mistake this for grand ideology of privatization of CUC. This is my two cents worth of comment.

GLENN H. MANGLONA (Amaga’)
Navy Hill, Saipan