Perhaps the biggest problem with privatization is that it
creates an incentive for the providers of services to "cut corners" when doing what they
are paid to do.
When a government service is privatized,
the providers are motivated by profit. This means that they will try as hard as they
can to cut costs so as to make as much profit as possible. This can be good, but at
times it can lead to the companies providing substandard services. Government agencies
themselves are more focused on providing good service as they have no real pressure to
save money (which is, of course, not always a good thing). Private companies focus on
saving money, which can, at times, be a bad thing.
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