Crafting successful privatization programs depends on capable governments. Even in countries whose institutions are flawed or underdeveloped, we often see public units at subnational levels acting as pockets of good government capabilities. This chapter advances the argument that privatization depends on good governments that not only set performance standards in dimensions that may not be prioritized by private firms but also guarantee that the whole process is diligently crafted and monitored. In other words, private firms and capable governments are complementary. With improved government capabilities, plurality ensues: capable governments not only experiment with outright privatization but may also use multiple forms of delivery, including hybrid public–private collaborations and even improved state-owned operations.

This chapter offers a practical decision-making framework describing conditions that will favor the adoption of alternative ways to deliver key services: generally speaking, privately managed activities, public–private collaborations, and public (state-owned) organizations, in their multiple forms and varieties. The chapter compares these forms based on their relative ability to generate effectiveness and inclusion, as well as with respect to their perceived legitimacy.

Beginning with an illustration of the potential and perils of engaging private operators to run prisons, this introductory chapters lays out the focus and argument of the book: the need to pursue a comparative analysis of the pros and cons of public, private, and public–private forms of service delivery, and the importance of government capability to successfully scrutinize and implement plural arrangements.