ABSTRACT
Two closely related analogies have been particularly influential to the evolution of the municipal privatization discourse.1 Both were developed during the 1950-1970 period. The first analogy, derived from the public-choice theoretic tradition, is one drawn between the government bureaucrat (specifically, a government agency director) and Homo economicus. The second, derived from the Walrasian economics tradition, is one drawn between a government unit (agency) and the industrial firm. These two analogies provided a framework that helped shape perceptions of, discourses on, and solutions to the urban fiscal crisis that erupted across the United States in the 1970s. The following section outlines the basic contours of these two analogies. After this, a brief historical sketch of the 1970s urban fiscal crisis is presented. It was largely out of this crisis milieu that a practical demand for a theory of privatization (one based on these two analogies and theoretical traditions) forcefully emerged.2 A discussion of the municipal privatization discourse’s evolution, in both its mainstream and heterodox variants, follows.
