Reassessing Privatization Strategies 25 Years Later: Revisiting Perry and Babitsky's Comparative Performance Study of Urban Bus Transit Services


Suzanne Leland is an associate professor of political science at the University of North Carolina at Charlotte, where she teaches courses on state and local politics, urban politics, and intergovernmental relations. She has published related articles in the Municipal Finance Journal and the Journal of Public Transportation. She is also the editor of Case Studies of City–County Consolidation: Reshaping the Local Government Landscape with Kurt Thurmaier.

Olga Smirnova is an assistant professor of political science at East Carolina University. Her research interests include public transportation performance, efficiency and effectiveness analysis, policy analysis, migration, special-purpose governments, public transit, and annexation. Her dissertation topic is “Does Government Structure Really Matter? A Comparison of Efficiency and Effectiveness of Special Purpose versus General Purpose Government Transit Operations.” She has published related articles in the Municipal Finance Journal and the Journal of Public Transportation.


Privatization appeals to citizen and politician desires for more cost-effective methods of service delivery. For this reason, it is important for public administrators to know when gains can be made by contracting out or privatizing services and when it is better to keep service provision in house. This article assesses the viability of contracting out and privatization of transit services. Following up on the 1986 work of James Perry and Timlynn Babitsky, which used data from the early 1980s, the authors revisit whether certain service delivery arrangements are more efficient and effective than others in the provision of transit services. Twenty-five years later, they find results similar to those of Perry and Babitsky's original study. Neither the type of government nor whether an agency contracts out has much impact on the efficiency and performance of urban bus services. The main difference between the two studies is that private transit agencies are no longer more efficient or effective than public providers.