Privatization as Delegation: Reformulating State Action in Private Delegation Terms
Recent expansions in privatization of government programs mean that the constitutional paradigm of a sharp separation between public and private is increasingly at odds with the blurred public-private character of modern governance. While substantial scholarship exists addressing the administrative and policy impact of expanded privatization, heretofore little effort has been made to address this disconnect between constitutional law and administrative reality. This Article seeks to remedy this deficiency. It argues that current state action doctrine is fundamentally inadequate to address the constitutional challenge presented by privatization, because it is both insufficiently keyed to the ways that privatization involves delegation of governmental power and simultaneously fails to allow governments sufficient flexibility in designing public-private relationships. The Article sets out a new constitutional analysis of privatization that reformulates state action in private delegation terms. Central to this analysis is the recognition that mechanisms other than directly subjecting private entities to constitutional scrutiny can satisfy the demands of constitutional accountability. The critical question thus becomes whether delegations of authority to private entities are adequately structured to enforce constitutional constraints on governmental power. By adopting a two-step approach that first singles out private delegations creating agency relationships between private entities and the government for special scrutiny and then asks whether adequate alternative accountability mechanisms exist, this Article offers a method to ensure the vitality of constitutional constraints without intruding unduly on government's regulatory prerogatives.