TABLE 2.

Criteria for privatization decisions by the Michigan Commission on Total Quality Government^a

Criterion
1.  Ability to specify the requirements of the service in advance of production
2.  Ability to switch from one producer to another without serious disruption in service delivery
3.  Achievement of tangible benefits, such as operating or capital cost savings, higher-quality services, providing services not otherwise available, risk sharing, shorter implementation time, and solving political problems
4.  Accountability in terms of process or outcome
5.  Amount of efficiency gain
6.  Availability or potential availability of competitive private-sector producers
7.  Characteristics of the activity (those concerning policy management, regulation, objectives related to equity, discrimination, stability of services, and social cohesion)
8.  Continuing need (if a program is not needed, it should be eliminated)
9.  Control of program or activity (necessary participation of the universities, State Board of Education, and the legislature)
10.  Costs of resuming government production if privatization or elimination options do not materialize as planned
11.  Independence between the nature of the final product and the methods used in its production (if hands-on control of the production process is necessary, privatization may not be a viable alternative)
12.  Legal constraints that may impede privatization efforts
13.  Determination of the level and quality of services needed
14.  Monitoring the costs of government agencies if privatization is the selected option
15.  Transition costs associated with shifting public-sector service delivery to private-sector service delivery.

^aDerived from Executive Order 1994–5 from the governor of Michigan in 1994.