NCPA - National Center for Policy Analysis


March 10, 2006

No matter whose priorities prevail in this year's budget debate, it is certain that the federal government will continue to devote billions to social services like foster care and drug abuse prevention. Yet, many wonder if the welfare state should return to its original privatized state, says Howard Husock, director of the Manhattan Institute's Social Entrepreneurship Initiative.

After the passage of the Social Security Act, privately funded agencies went public, believing that it would be more preferable; but things have not quite worked, says Husock:

  • Over the last decade, 22-36 children have died each year under the watch of New York City's Administration for Children and Families, and a recent federal review of state child welfare agencies found that not a single state complied fully with federal standards.
  • A 2005 federal study also found that Head Start -- which provides grants to local organizations -- has led to no gains in math learning or oral comprehension.

Meanwhile, social entrepreneurs have come forward to establish effective new social service organizations with little or no government support, says Husock:

  • Even though the Bush administration sees such groups less as substitutes for the welfare state than as potential new beneficiaries, a truly independent, philanthropically supported nonprofit sector could sidestep the pitfalls that have plagued government.
  • Additionally, the willingness of Americans to answer a call to service continues to be strong, as reflected by the emergence of new nonprofits like Teach for America, Prison Fellowship and Habitat for Humanity.
  • Moreover, service organizations which rely on private donations might actually prove to be more accountable for their performance than their public or publicly funded counterparts.

Furthermore, a reduced government role in social services would have to emerge gradually, but the question of how to do so should be part of any future discussions about the welfare state, says Husock.

Source: Howard Husock, "Privatize the Welfare State," Wall Street Journal, March 9, 2006.

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