Journal of
Volume 26 Number 4 
Fall 1999 
Privatization and the Future of Leisure Services
Miriam P. Lahey*

The provision of leisure services in Canada and the U.S. has, from the beginning, been based on altruistic values, and on the acknowledgment of leisure as a right for all citizens. Jane Addams, for example, concerned with the need to provide varied forms of play for children in the urban slums, opened the Hull House playground in Chicago in 1892. A decade later the notion of parks for the people had become a movement for municipal public recreation leading to the founding of the Playground and Recreation Association in 1906, with the explicit mission of fostering municipal responsibility for provision of public recreation for all people (Weiskopf, 1982). In Canada, the provinces of Ontario in 1883, and Manitoba in 1892, and the city of Saskatoon in 1912 passed legislation to facilitate the development of public parks (McFarland, 1970; Wright, 1984). From those early beginnings, municipal leisure expanded down through the decades until the late 1970s (Burton & Glover 2000).

In the early 1980s, however, a change began to take place in the management of public services in general. Some have attributed these changes to the ideological stances of new right politicians such as Margaret Thatcher and Ronald Reagan (e.g., Henry, 1993; Schultz, McAvoy & Dustin, 1988). Others, noting that left-leaning governments showed similar patterns of change, suggest that a number of different factors came into play, such as fiscal constraints and the perceived failure of some government services. Over the past twenty years, professionals in the fields of leisure service have struggled with a perceived value shift, as a variety of forces converged to change perspectives on the role of government in the provision of leisure services. First, the public sector essentially became more businesslike. Market principles were introduced into the delivery of leisure services; programs were expected to be self-supporting (Slack, 2000).

Furthermore, as economically advantaged countries moved into the "information age", many of their long-standing traditional values, procedures, and hierarchies have been called into question. Fukuyama (1999), dating the information society from the mid-sixties, describes the period as a time when industrial nations were beginning to face a number of deteriorating social conditions, most dramatically evidenced in mounting crime statistics, and decreasing family and trust indicators. He singles out the failure of trust as a central feature of the information age. While, for example, 73% of respondents in a 1958 US survey indicated that they trusted the federal government to do the right thing, by 1994 that figure had plummeted to 15%. Surveys in Europe indicated similar declines in citizens' trust of their governments, the police, and even religious institutions (Fukuyama, 1999).

Thus, in addition to a growing business/marketing approach to public services in response to fiscal pressures, a second change factor was a strong public distrust of government in general. Increasing globalization was a third factor, a factor based on the shift, again in business, away from the nation-state (de Jonquieres, 1987).

In detailing this antigovernment and antiestablishment trend, Drucker (1999) points to the recurring campaign promise by political candidates to "cut back on government". Drucker acknowledges that distrust of government (even by politicians seeking election) stems from the real failures of national governments in postindustrial societies. But, while admitting these failures, he argues that governments obviously have a legitimate and indispensable role. Their failures call not for abrupt and radical dismantling but for structural turnaround: an abandonment of practices that have not worked or no longer work; a careful analysis of half-successes and half-failures; and a concentration on structures and practices that produce results, that improve a government's ability to perform effectively in the new information age.

Approaches to Privatization
Included in structural turnaround of government is the privatization of traditionally public sectors or services. In essence, privatization refers to the utilization of private enterprise to accomplish tasks usually performed (but not effectively performed) by government agencies. To the extent that privatization is based on distrust of, and disappointment in, the performance of government, it can reflect ideologies antagonistic to late twentieth century socialism and Marxism, even antagonistic to the "liberal" big governments of Western democracies.

Despite these ideological roots, distrust of government and disappointment with its performance does not necessarily imply a conversely deep and abiding trust of commercial enterprise. On the other hand, even when relatively free of ideology, privatization is based on a prevailing assumption that the productivity and accountability standards, as well as the technological and informational savvy of the business sector, will produce measurable performance improvement, both short-term and long-term, in areas where government is now perceived to be failing.

In broader social terms, privatization claims that government simply cannot be all things to all people. This is a reversal in what Linowes (1990) sees as the worldwide trend of the past century: government growth toward being "all things". On the level of commerce, this growth has meant the nationalization, or at least the massive regulation of industry and business; on the level of social institutions it has meant the growing responsibility of government for the lives and welfare of its citizens. Linowes argues that this expanding role of government is counterproductive, oppressive even, and radically out of touch with the growing information age. An information society tends to foster freedom of choice. For its proponents, this is precisely what privatization offers. In fact, this is what it has always offered, since private support of public services has a long history. Even in ancient Greece and Rome, affluent citizens underwrote the cost of public festivities and other activities (Perlmutter & Cnaan, 1995). In today's versions, privatization has been spreading both geographically and in its array of services to include such typically government areas as transportation, health care, education, the criminal justice system, and leisure services.

The sale of government-owned assets is one of the most drastic, irreversible forms of privatization, a form which Solow (1988) calls sheer swindle. While it may provide a quick financial fix, in the long run it is poor business practice. Nonetheless, parks, wilderness areas, railroads, public radio, public buildings, airports, seaports, mineral deposits - all are examples of public assets which have been sold or whose sale is being negotiated (Hage, Cohen. & Black, 1995).

Contracting Out
Other forms of privatization are not so drastic. One of the most familiar of these is contracting out, whereby the government engages private agencies to perform specific services, e.g., cleaning or food services, rather than hiring their own personnel to perform these activities. Those who advocate contracting out seem to assume that outside contractors can perform the specified tasks better than government employees can. While this may or may not be true, most commentators agree that the element of competition is likely to be effective, and where contracting out can provide competition, it will likely improve service. Otherwise, as many existing samples testify, private monopoly cannot be expected to perform better than public monopoly. Those who favor minimizing government expenditures point to the savings that would come by paring back the government workforce, using private agencies instead. Not only would the said workers no longer be paid by tax-levy funds, but government workers tend to be paid at a higher rate than their counterparts working in private agencies. The threat to government employees' job security and earning potential is reflected in their unions' continuing opposition to contracting out services (Fox, 1999). Opponents to privatization are quick to point out the many examples of overcharging, expense inflation, greed, and just plain ineptitude in the long standing practice of contracting out of military supplies and equipment.

Selling off the Service
In addition to contracting out, advocates of privatization suggest that the government turn over completely to private enterprise the operation of certain publicly-run institutions. Some functions of postal service have already been shared with private providers, and the competition seems to have worked well. In several countries, prison systems have been under review for privatization. In the US, with its very large and increasing prison population, there is a very strong move in some quarters, to get the government out of the very costly and not demonstrably effective business of running prisons. However, while there is ready competition for at least some aspects of postal service, it is not so easy to imagine strong competition for provision of prison services, nor is it difficult to imagine the temptation to stretch the profit margin by substandard treatment of prisoners. Air traffic control is another government function which some believe could be carried out more efficiently by private providers. Those supporting the privatization of air traffic control point out that the many checks and balances inherent in government-run agencies inhibit operations like air traffic control which call for consistently developing high technology.

Other transportation agencies, including international, national, and suburban railroads, along with urban mass transit, have undergone privatization experiments in Canada, the US, and Europe. While some of these experiments have been successful, the major complaint about the process is that private agencies generally want to sift off for themselves the most highly-traveled, and thus highly profitable routes, while abandoning the less-frequently traveled outlying areas. Recent rail disasters raise questions too, about monitoring standards of safety in privatized service.

Vouchers are proposed as yet another version of privatization. Proponents of vouchers believe that they offer citizens a choice beyond the public agency, and that such choice introduces the healthy element of competition into the provision of social services. Vouchers have been suggested as particularly appropriate alternatives in the provision of education and in public housing. In the latter case they are seen as getting the poor out of "blocked" housing units, thus avoiding the stigma attached to living in the "projects." Opponents of the idea note the general lack of affordable housing, and suggest that landlords might be less than enthusiastic about potential tenants bearing vouchers. Although teachers' unions have vigorously fought attempts to introduce vouchers into public school systems, supporters for voucher programs maintain that they can deliver higher standards in education as in housing, for less cost.

Financial Services
Proponents of privatization believe that governments should not be in the business of lending money, whether the loans be made to home owners, farmers, students, or business organizations. Pointing out that the default rate for government administered loans is three times that of private operations (Linowes, 1990), they suggest that these loans could be better handled by banks, which have established administrative procedures, with government involvement reduced to making policy and monitoring standards. Some thirty-nine states in the US have recently hired corporations to distribute welfare benefits through a system of debit cards to be used at ATMs. These states hope through this private service to reduce fraud, save money, and draw poor people into the financial mainstream. They are finding, however, that in some instances, the emerging system has pitted profits against services in a way that has created new vulnerabilities for millions of welfare recipients. The City of New York is currently working with I.B.M. to develop a one-stop, on-line city center for payment of tax bills, parking tickets, and other monies owed to the city. The new system is expected to be more convenient for constituents, and at the same time save millions of dollars in overhead costs (Barstow, 1999).

Reacting to similar sweeping changes occurring in Canada, the Canadian Union of Public Employees warns their countrymen of the danger to their public services. Describing the breadth and depth of the "corporate takeover" happening in Canadian hospitals, schools, social services, and utilities, the report summarizes examples of privatization from each province, including such service areas as public housing for seniors, leased-back schools, recycling/composting systems, private laboratories, and personal care homes (Fox, 1999).

Privatization in Leisure Services: Parks and Municipal Recreation
A number of different versions of privatization have been tried in leisure services, particularly in parks and municipal recreation. Canada, Britain, and Australia, for example, have privatized some airports, at which both retail and leisure services are being offered by private providers with great success. The sale of government-held assets to private agencies threatens parks and wilderness areas at local, regional, and national levels. Hunter (1996) and Fulton (1996) are among those who point to the dangers to the environment occasioned by the Canadian government selling off wilderness areas to developers. Knize (1999) describes tensions between environmental groups and politically powerful "corporate" ranchers whose grazing on public lands is subsidized by the government. The environmental groups want the "welfare cowboys" run off the range, and the land used only for wildlife and recreation.

There has already been a certain amount of contracting out of services in recreation and parks, along with the introduction of fees for the use of previously free parks and recreation areas. Rollins and Trotter (1999), who studied public response to such user fees found that, in general, people were willing to pay a modest fee in order to keep the parks open. Others have indicated concern that these steps may be just the beginning of a process which will compromise some critically important values. It has been pointed out, for instance, that parks are places where people go precisely to escape from private enterprise and commercialization of leisure.

Winnipeg city managers have proposed contracting out recreation facilities, to the dismay of municipal employees in that city (Fox, 1999). Esteve (1997) describes an Oregon plan to raise capital funds for the state parks system through a state lottery, and to offer, first to local municipalities, then to private enterprise, the parks where budgets do not balance. Again, the concern is expressed that private enterprise will only want the parks which are doing well, which have, in fact, supported the others.

Public-Private Partnerships
Privatization is not necessarily equated with profit as driving force. Usually, private contributions for public purposes have been of two types-first, special gifts such as art collections, or lands for parks; second, special contributions for public events, such as fireworks on holidays. In an ongoing relationship, a nonprofit conservancy group worked with the city of Watertown, New York, to develop private funding, provide volunteers, and oversee some of the operations of a deteriorating zoo. The conservancy took responsibility for no-fee park activities, which means that they must continue to raise funds to cover the ongoing operational budget. City officials in Houston, Texas rejected plans to privatize the city's largest golf course, turning instead to a not-for profit, community-based organization to help it raise almost a million dollars. The combined efforts of the city and the private contributors were successful in renewing the historic park, but it is impossible to avoid the lurking question - how often can government appeal to private contributors?

An unusual combination of public and private enterprise is reported by Perlmutter and Cnaan (1993). The authors describe what is essentially an institutionalized policy of capital campaign and donation seeking from private sources on an ongoing basis to fund traditional public recreation services, a phenomenon which these authors see as a critical shift from earlier forms of public reliance on non-tax dollars. Whereas, they point out, earlier gifts depended on the initiative of donors, supporting programs of their choice, this approach is designed to enhance public services through organized fundraising. A striking difference in the new fundraising. is that the onus is on the recreation administrator to assume an entrepreneurial posture, one traditionally associated with leadership in the profit-making sector, but now increasingly seen across public agencies, driven by fiscally conservative trends. The case study, used by the authors to examine public policy issues related to privatization and entrepreneurship, follows the Commissioner of Recreation in the city of Philadelphia through a budget crisis. It is a US scenario, which may not be precisely applicable to Canadian or European cities. At the very least, however, the issues analyzed will surely have heuristic value for a discussion of privatization across national borders.

The case described by Perlmutter and Cnaan begins in 1991, when the city of Philadelphia was in a state of bankruptcy. Because of the increased costs of services, public demand for additional services, reduced state and federal aid, and a declining tax base, the city faced a lowered bond rating, and was unable to meet its financial obligations. The Department of Recreation was under even further constraints, as not only were many programs dramatically cut, and the seasons shortened for most sports, but the very maintenance of the department's physical plants was threatened. When the commissioner took office in 1992, appointed by the newly-elected mayor, he found that the Recreation department had just completed a strategic planning process with a private consultant. The major finding of the planning process was that the department owned too many properties with too few resources to properly maintain and utilize them. The direction of the consultant's recommendations was to sell off some of the properties, and to use the funds derived from the sale to support reduced program offerings.

The consultant's recommendations ran directly counter to the commissioner's vision of expanded citywide programs. Perlmutter and Cnaan (1995) give a detailed description of the commissioner's process in pursuit of his vision, a process which led to eventual success. Of particular interest here is the description of the commissioner's vision for the department, a vision predicated on the philosophy of a partnership among the city, local neighborhood residents, and businesses in the community.

The concept of partnership required full cooperation and involvement of all the parties in both planning and implementation. It is important to note that the involvement of business, according to this philosophy, was not merely to provide money, but ... to bring the private sector into the execution of public policies. Thus all three partners were major players from the outset, not just to be used in partial or opportunistic manner. (Perlmutter & Cnaan, 1995, p. 4)

It is clear that such a philosophy carries the idea of privatization far beyond the notions of contracting out, or voucher systems, into a collaborative partnership with a sense of shared responsibilities.

Privatizing in Therapeutic Recreation: Prioritizing People
While, as noted above, the literature provides explicit instances of privatization in parks and municipal recreation, in therapeutic recreation the issues are more complex. Since therapeutic recreation is necessarily tied to existing health care systems, its practice tends to reflect differences among national models of health care. Some of these differences are vast. In the US, for example, there is no national health plan, except those provided for the elderly and the indigent. Employers generally pay for some part of their employees' health care as part of negotiated benefits packages. There is great variety among such plans and, in fact, more than forty-four million working US citizens have no health care coverage at all. But even for those with coverage, health care in the US has moved recently more and more in the direction of for-profit business operations (Fins, 1992). Indeed, many of the critiques recently directed against the US medical model focus on its commodification of care and service.

The nature of society in Canada, Britain, and Western Europe, on the other hand, is such that their governments for the most part undertake to provide for the health care of all their citizens, although even here privatization is beginning to creep in. Saskatchewan, for example, the birthplace of socialized medicine in Canada, has privatized some medical laboratories and some home health care services (Fox, 1999).

As a profession lacking its own well-defined philosophical consensus, therapeutic recreation is prone to follow the existing medical model as it develops its definition of service. The unabashedly commercial aspects of the US medical model can be discerned within recent developments in therapeutic recreation's professional organizations (Huston, 1995; Grote, Haal, Krider, & Mortensen, 1995). In short, in the US, at least, the medical model brings to therapeutic recreation not only a clinical framework, but also the framework of the medical marketplace in which the patient is product.

A number of voices have been raised in concern that the commercial model can be used in health care to deconstruct professional values and goals (Sylvester, 1996; Veatch, 1992). Their common warning is that when professional self-interest drives decisions about service, the professional/client relationship inevitably erodes, and society begins to lose trust in the professions.

This paper opened with the suggestion that people's loss of trust in their governments and societal institutions has contributed, along with other factors, to the expansion of privatization in the West. Some (e.g., Burton & Glover, 2000) see various alternatives for delivering leisure services, whether private, public, or partnership, as reflecting and reinforcing the reemergence of the enabling role of the state. Others are concerned about the impact of privatization on community, especially in the light of globalization and the transnational reach of the information age. Leach (1993), for example, describes the rise of consumer capitalism just prior to the beginning of the information age, as a system which emphasized self-pleasure and self-fulfillment over community or civic well-being.

Waitzkin (1983), writing about the "second sickness", the sickness of society, describes how, as an intern and resident in medicine, he was troubled by the realization that drug companies and medical equipment manufacturers were making enormous profits from innovations that had dubious effectiveness in patient care, and vastly increased overall health care costs.

Privatization is embraced, ostensibly, to continue providing services in the face of dwindling fiscal resources. It purports to provide better services, more efficiently, for less money. But, what starts our as cost-effective service easily turns into a profit-making venture, as the history of recently-introduced managed health care in the US dramatically illustrates (Needleman, 1999).

When the profit motive drives service, the quality and scope of service can be curtailed, and those affected will inevitably be the most vulnerable in society. When fees are introduced, those who can pay are able to enjoy services. Those who cannot are abandoned. The American Therapeutic Recreation Association Reimbursement Committee urges practitioners to "prioritize the patients we know we can obtain an outcome with, and market ourselves as a cost-effective, reimbursable service" (ATRA 1994, p. 3). Left behind in this philosophy are those who are not "profitable": people with chronic illness, those with Alzheimer's disease, people with mental health problems, and people with developmental disabilities.

Similarly, privatization in municipal recreation, even such creative and successful partnerships as the Philadelphia case described above, has a number of caveats. Among these are: the consequences for nonprofit agencies already dedicated to providing similar community services; the possibility that potential donors might put pressure on city officials; the questionable guarantee of long-term continuance of donations; potential competition for donations among governmental programs, some of them (e.g., recreation) popular with donors, others (e.g., housing) probably less so; the viewing of donations as a kind of voluntary tax.

The implications of privatization for leisure services are far-reaching, far enough to take us where we might not really want to go. Perhaps they are best summed up in Robinson's poignant question on the selling of the wilderness "What can we rescue out of this accelerating desperation to sell -forests and weapons, even children - and the profound deterioration of community all this indicates" (Robinson, 1999, p. 64 )? To the extent that we are willing to put leisure up for sale in the commercial marketplace, we risk betraying our roots and our professional calling. The leisure service professions were founded in a vision that saw community and play as central. Our role in shaping and defining the public good may be compromised if we surrender to commercial self-interest. We cannot hold back privatization, but neither can we afford to be naive about the implications of policy decisions based solely on the bottom line.

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*Miriam Lahey is an Associate Professor, Department of Health Services; Director of General Education at Lehman College, City University of New York. She is concerned about the rise of consumer capitalism and its impact on human values in general, and on leisure in particular.

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Other articles from this issue:

Funding the Individual: An Idea that Spans the Ideological Spectrum
Troy Glover

Privatization and the Impact on Voluntary Associations: Tensions Between Service Provision and Citizenship
Susan M. Arai

Private Means, Public Good: Therapeutic Recreation Entrepreneurs
Robyn Kunstler

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