My gut instinct is to favor privatization for a number of reasons:
1. If a private company is not doing an effective job, its contract can be terminated.
2. If government workers are not doing their jobs, it is often very difficult to terminate their contracts, and it is almost unheard of to eliminate a government agency.
However, what matters is not my opinion by empirical facts. To give you a well informed response to your question would require doing a lot of research. Here I can only skim the surface of available information. Nevertheless, I will list what look like a few helpful links, including the following:
When exploring a highly controversial issue such as this one, it is helpful not only to consult Google and Google Books but also to consult Google Scholar, which is designed to provide access to peer-reviewed academic studies. Here is the first page of a Google Scholar search on this topic:
It is interesting that in the UK we have seen the standard of cleaning in hospitals fall with the privitisation of cleaning services, giving rise to various superbugs and the worsening of conditions. This of course is just one negative example, but on the whole I agree with other editors who are suspicious of privitisation and whether it really does create a more efficient and effective system.
Efficiency would be increased if business owners had a profit incentive, something the federal government never has. It's true there are some aspects of government I would not want to be privatized for security and other reasons, but it is a certainty that privatization offers an incentive to be more efficient and effective. It's much easier to be careless with other people's money, especially when there is as little true accountability as we see in government today. Putting personal money at risk would certainly increase the odds of delivering an effective, efficient product.
One of the major concerns I see in the private sector is the disparity of income levels between management and labor. As the gap between "haves" and "have nots" widens, we are going to see more problems in society as a whole. If governmental functions are privatized in a transparent and accountable manner, private contractors may be able to fulfill functions with increased efficiency and reduced expense. If privatization leads to higher salaries for company executives while workers are given low-paying jobs or manufacturing of components is outsourced overseas, that is not going to benefit the overall economy.
Private systems by and large tend to operate more efficiently than governmental operations. Governments by their very nature do not operate toward a bottom line, or with a profit motive as do private contractors. In our capitalist system, such private systems are apt to be more competitive and perhaps more demanding of workers; but it would be more efficient, both in terms of cost and productivity.
I assume that you are talking about the privatization of government services.
My opinion is that there are many aspects of government activities that can and should be privatized. However, it is not the panacea that many people seem to think that it is. For example, it seems that privatizing things like toll roads (as Indiana and some other states have done) is a fine idea. Private companies are surely capable of maintaining roads just as well as government is.
However, with more sensitive areas, it is not clear to me that private contractors are a good idea. For example, our experience in Iraq and Afghanistan with private security contractors seems mixed. These companies' employees end up representing US interests in these areas, but they are not as disciplined and controlled as our actual military. This can help lead to problems as the contractors act in ways that make the US as a whole look bad.
So, there are some activities that can easily be privatized. Others should not be. The problem, of course, is determining which activities fall in which category.
Please follow this link to see a debate on this issue.