Public-Private Dichotomy Essay

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Using the public-private dichotomy to describe social policies can be misleading. Characterizing any dichotomy are two mutually exclusive parts that together comprise the whole. A public-private dichotomy fits a social policy system if its components are clearly public or private, but not both. Together, public and private exhaust all kinds of social policies. If any policies fall outside this either/or categorization, then it is a false dichotomy, or a mistake to use the dichotomy label.

The importance of social policies rests in their affecting welfare through provision and regulation. Social policies often provide such services as education, health care, and psychological counseling. Social policies may also provide income or in-kind benefits, such as food stamps, subsidized housing, or school vouchers. Social policies may regulate human behavior, particularly if enacted as law to regulate food quality, require school attendance, or mandate medical testing.

Conceptualization of public-private qualities of social policies considers five key characteristics: accountability, management, stimulus, eligibility, and who pays. Public implies democratic accountability. Public social policies are established, managed, modified, and sometimes eliminated by government officials who are either elected or accountable to elected government officials. Private does not mean a lack of accountability, but that another entity, perhaps the individual alone, is responsible for the program. For example, an individual can decide to establish a savings account for eventual retirement, how to invest the funds, and eventually when and how to withdraw the funds.

A key component distinguishing public and private programs is who or what manages the social policy program. Government officials or a government institution manage a public program, such as the federal government administering Supplemental Security Income, the Social Security public program that provides a pension to individuals who have low incomes. Private entities manage a private program; for example, for purposes of saving for retirement, an investment company forms a fiduciary relationship through contract when managing an investor’s savings.

Another key component for characterizing a social policy program as public or private is the program’s stimulus. Many public programs obligate an individual to participate. The Social Security program mandates that nearly all paid workers contribute to the Social Security program. In contrast, an individual is not required to place his or her earnings in a private savings account.

Perhaps the most visible components for characterizing a social policy program as public or private are eligibility and who pays. Typically, we think everyone is eligible to enroll in a public social program or benefit from a public social service. A clear example is public elementary education. All children in the United States are entitled to a free and appropriate public education. In contrast, private schools establish procedures to decide on admission of a child, including application fees, admission tests, and interviews. The private school controls eligibility and can decline to admit an individual.

The last key component is who pays. Medicaid is a U.S. public health insurance program that is financed by federal and state government revenues. An individual who self-pays for private health care relies on his or her own funds and health and financial acumen to protect his or her well-being as the sole payer.

When applied to social policies, public and private labels can hide critical aspects of social policies, including similarities. As is true for public programs, the federal government does stimulate and manage many private social policy programs. For example, it obligates employers who offer defined-benefit pension programs to contribute premiums to the Pension Benefit Guaranty Corporation, a federal organization that insures payment of pensions in case the employer is incapable of doing so. The federal government regulates vesting and portability of employment-based health insurance and pension plans through laws like the Employee Retirement Income Security Act and other laws. Because government regulates many private social policies, it is incorrect to say that many public-private social policies can be categorized into one or the other.

Public-private designations can be confusing. An important example is who pays for Medicare hospital insurance in the United States. Medicare is the largest U.S. public health insurance program, yet the federal government does not pay for Medicare Part A. Employers and employees pay for Medicare Part A, which is hospital insurance, through payroll taxes. In contrast, U.S. employment-based health insurance plans are considered private, but these plans enjoy tax advantages paid for by U.S. taxpayers. In debates over the number of Americans without health insurance, spiraling costs, and Medicare’s uncertain future, what frequently goes unnoticed is the fact that many U.S. taxpayers financially support others’ private health insurance even when their own employers do not offer health insurance. Private health insurance is an example of a social policy in which it is difficult to exclude public from private efforts because social policy has purposely made it difficult to divide public from private efforts.

The public-private dichotomy can weaken eligibility and accountability. Across the country, many communities are responding to failing public school systems by offering vouchers to parents and caretakers to apply to a nearby school, whether that school is a public school, private school, or religious school. A problem with this voucher system is that many children are eligible only to attend the public school system where they reside. Most children cannot enroll in some of the private and parochial schools because they require supplemental tuition, which most low-income families cannot afford. Because of this barrier, many children are eligible only to receive education from public systems that their governments regard as failures.

In Zelman, Superintendent of Public Instruction of Ohio, et al. v. Simmons-Harris, et al., 536 U.S. 639 (2002), the U.S. Supreme Court ruled that the Ohio public voucher scheme does not violate separation of church and state because the state government does not directly fund parochial education. Instead, this public-private relationship allows the Ohio state government to transfer tax revenue to private individuals, who can then apply the tax revenue to a private, religious school. Because it is private and religious, the school’s curriculum is beyond democratic accountability; voters cannot hold school officials accountable for what is taught, despite the school receiving tax revenues. This voucher example highlights that private is a label not only for market, but also for religious and nonprofit undertakings.

With the potential harms of these social policy complexities, should we reject the public-private dichotomy? The public-private dichotomy is useful for identifying inconsistencies in and revealing inequities arising from social policies. An important example is the decision to have a child or adopt a child. Although considered among the most private of decisions, for some people becoming a parent is a public decision. Laws and social policies influence this decision and, in some cases, prevent choices. In the United States, strenuous debates continue on whether a gay couple has the right to adopt a child, with some states completely prohibiting adoption and some states requiring gay couples to follow a legal process. Public debate also centers on whether a parent or caretaker should be able to control a minor’s decision on whether or not to become a parent.

In nearly half of the states, a minor must have a parent’s consent to have an abortion, and in most of the remaining states, a minor must prove she has first notified her parents. What is a private decision for many people is a decision shaped by laws and social policies for gay couples and minors.

Despite these instances of government intervention into private matters, some decisions are still considered beyond the realm of public social policy. One instance is corporal punishment of children. If I strike a neighbor’s child, the police will probably charge me with assault. If I strike my spouse inside our home, the police will probably charge me with domestic violence. If I strike my child, however, it is not an assault, and inside my home, it is not domestic violence. The public-private dichotomy thus raises questions of why public intervention toward some groups is legal but toward other groups is not acceptable.

The public-private dichotomy is frequently used to define and designate social policy responsibilities. A review of key characteristics suggests the public-private dichotomy is a false dichotomy, because many social policies incorporate public and private efforts to provide benefits and services. Nevertheless, even if a false dichotomy, the public-private dichotomy may still be useful for exposing inconsistencies in and inequities arising from social policies.

Bibliography:

  1. Benhabib, Seyla. 2004. The Rights of Others. New York: Cambridge University Press.
  2. Gobetti, Daniela. 1997. “Humankind as a System: Private and Public Agency at the Origins of Modern Liberalism.” Pp. 103-32 in Public and Private in Thought and Practice, edited by J. Weintraub and K. Kumar. Chicago: University of Chicago Press.
  3. Gran, Brian. 2003. “A Second Opinion: Rethinking the Public-Private Dichotomy for Health Insurance.” International Journal of Health Services 33(2):283-313.
  4. Minow, Martha. 2003. Partners, Not Rivals: Privatization and the Public Good. Boston: Beacon Press.
  5. Turkel, Gerald. 1992. Dividing Public and Private: Law, Politics, and Social Theory. Westport, CT: Praeger.

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