Private Park Operations on the Freakonomics Blog

A nice article on the private park operations contracts recently issued to keep some California State Parks open.  In particular, I cheered at this:

The experiment upon which the state is set to embark will provide an opportunity to compare the relative efficacy of resource management provided by central government control, private ownership, and local cooperation.

I welcome this comparison.  In fact, I long for it.  Beg for it.  I have always thought it was telling that for all the skepticism aimed at private operations of public facilities, the private operators in this case are the ones who have been begging for an independent comparison of costs and results, while state agencies have resisted such studies.  I wrote in the comments:

I was one of four private companies that bid on these parks. One thing that is often lost in all this is that there are over 1000 very similar public parks already under management in a USFS service program that dates back over 30 years. Three of the four bidders for the CA parks, and the winning bidder, came from this program.

I applaud your observation that a natural experiment seems to exist here. But the odd part, for me, is that such an experiment has existed for decades, and no one wants to follow up. Here in AZ, AZ state parks has 35-ish parks under its management and our company has 35-ish federal parks under private management. Many are next door to each other. But it turned out to be virtually impossible to get the faculty at Arizona State who was preparing recommendations on private management, or the press, or the agency itself to actually do the comparison. Everyone wants to hypothesize on the results based on their faith or lack thereof in private enterprise, no one wants to do a direct comparison.

This frustrated me since I knew we managed the parks at half the cost, and had better customer service (camparizona.com ranks public campgrounds. In the survey taken a year or so ago our company had 3 of the top 5 public campgrounds under our management, and the state parks agency had zero)

I tried to do one direct comparison on my own: http://parkprivatization.com/2012/01/case-study-private-vs-public-park-operations/. It would be awesome if someone in academia were to take this on. Those interested should contact me at my park blog: http://www.parkppp.com.

By the way, it is incorrect to talk about loss of control to private operators. All of our contracts are highly structured with hundreds of pages of standards and restrictions. We cannot add a new service, modify or add structures or facilities, change fees, or most anything else without seeking approval from the parks agency. The agency still establishes the character and services and facilities of the park – we just provide the customer service and cleaning much less expensively.

These contracts are almost always structured as concession agreements, meaning the private operator gets paid just with gate fees from the customer, not with appropriations. If customers hate the park or the service, no revenues. I get asked all the time, “won’t you just stop cleaning the bathrooms so you can make more money.” I answer, “Sure, same way that McDonalds and Marriott and Nordstroms make most of their money by not cleaning their bathrooms.”