Privatization as delegation

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 new administrative reality. This Article seeks to remedy that deficiency. It argues that current state action doctrine is fundamentally inadequate to address the constitutional challenge presented by privatization. Current doctrine is insufficiently keyed to the ways that privatization involves delegation of government power, and simultaneously fails to allow governments sufficient flexibility in structuring public-private relationships. This Article proposes instead a new constitutional analysis of privatization that reformulates state action in private delegation terms. Under the proposed analysis, the critical question is whether delegations of authority to private entities are adequately structured to enforce constitutional constraints on government power. Central to this approach is the recognition that mechanisms other than directly subjecting private entities to constitutional scrutiny can satisfy the demands of constitutional accountability, and can do so without intruding unduly on government regulatory prerogatives. Where such mechanisms are lacking, however, grants of government authority to private entities represent unconstitutional delegations. To implement this approach, the Article advocates a two-step inquiry 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.