The Influence of Privatization on the Cost-Effectiveness of Delivering School District Support Services

An increasing number of school districts have targeted ‘hard services,’ like maintenance, student busing, or school food service for privatization because of its potential to reduce costs and streamline processes (Mackinac, 2008; Ralston et al., 2008; Globerman and Vining, 1996; Brown, 1995; Doyle, 1994). Yet the decision to privatize school support services is often done without complete knowledge of its influence on areas other than cost. This lack of knowledge may mitigate desired outcomes. As indicated in the findings of this study, district administrators typically focus on a cost-efficiency model that does not take into account achieving program outcomes or other factors that may influence their decision. So while the overall costs are reduced, the effectiveness of the program may suffer. Consequently, school districts may benefit from a more comprehensive way of evaluating the decision to privatize. Through interviews with school district administrators and regression analysis, the findings illustrate that there are several factors that influence the decision to privatize and that consequently mediate the successful delivery of school district food service programs. This research utilizes a cost-effectiveness analysis as way of evaluating the success of the decision to privatize school district food service programs, specifically those that participate in the National School Lunch Program (NSLP). In addition to cost-effectiveness, it includes a factor analysis and finds when areas like district philosophy of education, are not included in the decision-making process, the program success may be stifled. This research can assist school district administrators in evaluating the decision to privatize services.