Privatization, Business Attraction, and Social Services across the United States

Privatization, business attraction incentives, and limited social service provision are market-oriented policies that broadly concern social scientists. These policies are conventionally assumed to be widely implemented across the United States, a world model of neoliberal development. This study takes a new look at these policies, providing a first view of how they unfold across the nation at a geographic scale that drills down to the local state. We document the extent to which localities privatized their public services, used business attraction, and limited social service delivery in the last decade. Extending national-level theories of the welfare state, we focus on two sets of factors to explain where these policies are most likely to be utilized. The first, derived from the class-politics approach, emphasizes class interests such as business and unions and political-ideological context, and anticipates that these policies are utilized most in Republican leaning, pro-business, and distressed contexts. The second, derived from the political-institutional approach, emphasizes state capacity and path dependency as determinants. The analyses are based on over 1,700 localities, the majority of county governments, using unique policy data. Class-politics variables have modest relationship to neoliberal policies and show that business sector influence and public sector unions matter. The findings strongly support the importance of state capacity and path dependency. Overall our study challenges assumptions that acquiescence to neoliberal policies is widespread. Rather, we find evidence of resilience to these policies among communities across the United States.