M. Byrna Sanger, The Welfare Marketplace: Privatization and Welfare Reform.

M. Byrna Sanger, The Welfare Marketplace: Privatization and Welfare Reform. Washington, DC: Brookings Institution Press, 2003. $16.95 papercover.

In the decades following the New Deal, it was widely accepted that government would be the primary funder, administrator and provider of a range of social services designed to meet the social needs of citizens. The institutionalization of this idea resulted in the equation of term 'social welfare' with the public social services. Although the contribution of non-profit organizations, religious charities and commercial providers to social welfare was recognized, their role was not given much prominence and in some quarters it was even believed that they would eventually wither away as government services expanded and encompassed even greater responsibility for people's well-being.

As Sanger argues, the dominance of the state in social welfare provision has been dramatically modified over the last twenty years. Although the state remains a primary funder of social services, a new and much more fluid pluralism has emerged in which non-profits and commercial providers compete in a new welfare market place to secure funds for social service programs. Contracting is not only widespread but it has changed the way public agencies operate. It has also a major impact on the non-profit sector changing what Sanger describes as the very soul of voluntarism. Of course, the engagement of for-profit firms in social service provision has also altered the way the welfare sector was previously viewed. While commercial providers such as private health and life insurance firms worked directly with consumers and, apart from tax subsidies, were limited in the advantages they secured from government, they now derive substantial funds and profits through their role as social service contractors. The involvement of large commercial firms such as Lockheed Martin in social service contracting suggests that the welfare market is a lucrative one for providers motivated primarily by profit.

Sanger's book is concerned with the way contracting out is affecting traditional public welfare programs, non-profits and commercial providers in the new welfare market place. The book is based on studies of contracting out in four urban areas namely, Houston, Milwaukee, New York and San Diego. Interview were conducted with public officials and the managers of commercial and non- profit contractors in each area and public documents relating to social service contracting were scrutinized. The study focused on the TANF programs administered in each area. It sought to determine first, how significant contracting out has become; second, what do public agencies seek to achieve through contracting; third, how have non-profit and for-profit providers responded and fourth, what are the risks and challenges involved. However, the study did not assess the performance of contractors with regard to client outcomes.

In seeking to answer these questions, Sanger provides a great deal of useful information about the growth of social service contracting and the way federal, state and local governments have promoted the growth of the welfare market. She demonstrates that contracting has grown enormously and that it has radically altered traditional modes of public and voluntary provision. Contracting has changed the character of government and non-profit agencies as well and created a complex and fluid situation which is not always conducive to effective service delivery. Despite some advantages, the widespread use of contracting has also had a negative effect on continuity, staffing and accountability. Although Sanger's study does not reach definitive conclusions about the impact of contracting out on the welfare of clients, it cautionary findings should be heeded by those who believe that social needs can best be met through competitive social service provision in the welfare market.