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Managers of a for profit activity have to generate a positive return for their investors or go out of business in the long run. They have an incentive to make good business decisions, which means that they have to satisfy the needs of their key stakeholders.. If a public service is outsourced, i.e. public transport in Melbourne, Australia; sanitation services in Georgetown, TX, etc., the contractor has to generate a return for its stockholders whilst meeting the performance standards of the sponsoring agency, i.e. the Melbourne City Council. If he does not meet the performance standards, he will lose money on the contract and perhaps the contract and the business. A government bureaucrat has little incentive to get it right. If the agency is managed poorly, the results are usually fobbed off on the taxpayers.
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