Rules for a Flat World(or Regulatory Dystopia)
Hadfield is wholly correct in her observation that we desperately need better regulation...However, if regulation is a public service—if it is something that we as a society need and value because it brings economic as well as social value to everyone—then it cannot be financed or developed privately. It must be financed publicly through equitable, progressive revenue sources, and it must be developed by public, democratic processes.
As discussed in part II, the complex regulatory framework for legal services in England & Wales, which has its origins in the fragmentation of the legal services market of those countries, has led to a seemingly novel result: regulatory competition, or competitive regulation. In essence, legal service providers in England and Wales are not necessarily required to work with one regulator—in some contexts, they can select one from a panel of approved regulators.
As novel as the framework in England & Wales may appear, the phenomena of regulatory competition by no means originated there. Corporate law in the United States, and notably the choices available to companies as regards state of incorporation, is an obvious example. More specifically, in the US, a company is not required to incorporate in the state where its principal place of business is located. In this context, corporations can “shop” for the state that offers the rules of corporate governance that they find most amenable for them.
In her book Rules for a Flat World: Why Humans Invented Law and How to Reinvent It For a Complex Global Economy, Gillian Hadfield provides additional examples, both historical and current, such as the international markets of medieval Europe which competed for merchants based upon the quality of their rules and mechanisms for resolving commercial disputes, and the Dubai International Financial Center, which Hadfield describes as the world’s first modern “competitive law zone” created to attract international financial services to Dubai.
On the topic of alternative structures, Hadfield has published a number of ground-breaking and highly compelling pieces. They are essential reading for anyone interested in the topic. As just a brief sampling, in “The Cost of Law: Promoting Access to Justice through the (Un)Corporate Practice of Law” and “Life in the Law-Thick World: The Legal Resource Landscape for Ordinary Americans” (with Jaime Heine), Hadfield uses empirical evidence to demonstrate that there can never be enough pro bono (free) legal work or enough money for legal aid that could even come close to satisfying the huge unmet need for legal services in the US. In doing so, she powerfully brings home the importance as well as the urgency of ending the lawyer monopoly on legal services so that others can try to fill at least some of the unmet need. In “Legal Barriers to Innovation: The Growing Economic Cost of Professional Control Over Corporate Legal Markets,” Hadfield explains how much of legal work is economic activity. As such, she makes clear the importance of the regulation of legal services for the effective functioning of a market economy. In “Legal Infrastructure and the New Economy,” Hadfield provides fascinating and valuable insight on the challenges that companies like Google, Mozilla and Cisco Systems face in obtaining legal services. In doing so, she resoundingly disproves the commonly held assumption that large, well-resourced companies are able to easily meet their needs for legal services.
A Giant Leap
In Rules for a Flat World, Hadfield also discusses alternative structures but most of the book addresses a different topic. She extolls the virtues of regulatory competition. In doing so, she takes a step beyond regulation as we know it. She applauds not just competition among public (or governmental or state) regulators, but also encourages competition among private regulators in a privatized market of regulatory services.
In a nutshell, Hadfield’s explanation is as follows: Mass digitalization has changed how we interact with the world, particularly changing our economic interactions. No longer are they embedded in physical objects or fixed locations: instead, they are disembodied and exist everywhere and nowhere at the same time. Powerful computers can analyze information at very high speed; virtual reality devices allow us to immerse ourselves in places many miles away; the internet of things connects us all in ways of which we are barely aware. This “massive leap” in the complexity of the economy has had an enormous impact on the demand for law, and our “legal infrastructure” is not able to catch up.
There are three different “lenses” Hadfield presents through which we can observe that our existing systems are “bursting at the seams.” The first lens is that of complexity: contracts for seemingly the simplest things, like buying a song or installing a software update, are multiple thousands of densely worded documents that are nearly incomprehensible. Statutes, and the regulations they generate, are often hopelessly complicated. Hadfield cites the example of the Dodd-Frank law, which generated ten thousand pages of regulations, including 46 rules involving four different regulators governing just one type of financial transaction. For Hadfield, the “most dramatic evidence” of complexity lies in the 2008 financial collapse: subprime mortgage agreements and the “fancy financial instruments” created by slicing them up were incomprehensible not only to ordinary people but to sophisticated investors like Warren Buffet.
The second lens is that of cost: lawyers and legal processes often cost far more than the benefit they offer. Further, even if it might be worth it, many people simply don’t have enough money to pay. As a result, in many cases people try to resolve their legal problems without lawyers, or simply give up and forgo their rights.
The third and perhaps, for Hadfield, most important lens is that of quality. She uses this term not only in its traditional sense of how “good” a lawyer’s work is, but also—and especially—in a much broader sense. “Quality” encompasses the growing needs for highly specialized lawyers, for a greater range of types of legal help available on the market (not everyone can afford or wants high-end “BMW” legal services); for lawyers who better understand both the needs of businesses in general and those of global businesses; for lawyers who better understand “how to think about risk;” and for lawyers who know how to calibrate the amount of time and effort they devote to a piece of work to the value the client places on work for the client (“lawyers insist on serving up fine china when a paper cup would do”). Additionally, Hadfield explains that businesses that work across borders are forced to meet their legal needs in a fragmented and often incoherent manner. This is because on an international level, our legal systems don’t offer solutions for those types of businesses.
In sum, the legal system that lawyers built over the past few hundred years has served us immensely well in that it has grounded the “spectacular growth” the advanced world has enjoyed since 1800. Hadfield, however, argues that today it is not enough. The system has too many limits, and it needs to be reinvented to meet the needs of today’s highly complex society.
Why hasn’t our legal system been able to reinvent itself, Hadfield asks: “Why hasn’t our legal infrastructure responded better to the changes in the global economy?” For Hadfield, the reason is that “we rely too much on central planning and not enough on markets” to build the components of our legal infrastructure. Hadfield explains that in the 20th century virtually all industrialized countries—ranging from the far left Soviet Union to far right fascist countries like Germany and Italy and including democratic societies like Britain and the US—were drawn to central planning as the best way to assure that resources were put to the best use. However, by the end of the 20th century, the complexities of the economy placed far too great a burden on anyone who tried to “sit atop the pile and direct from on high.” At this point Hadfield cites the economist F.A. Hayek, considered by many to be a founder of neoliberalism. Hayek argues that the more complex an economy becomes, the less amenable it is to centralized planning. After pointing this out, Hadfield then quickly asserts: “the reason is nonideological and has nothing to do with liberal democracy and the proper role of government in promoting human well-being. It is supremely practical.”
Following Hayek’s “deep insight,” Hadfield argues that “markets,” and not government, are the solution to this problem. This is for three reasons: First, through decentralization markets allow us to give greater discretion in how to solve a problem to those across the globe who are at the “bottom of the pyramid:” They are the ones who are most likely to have the specialized information and expertise required to solve that problem. Second, markets create economic incentives for those people to do their work: to discover and apply information. Third, markets help to manage the “information burdens” of a complex economy because they systematically transmit the information they have: when a competitor in the market succeeds, others learn from them and use it in their own businesses. For these reasons, Hadfield urges, we should “create competitive markets for the production of legal infrastructure.” In doing so, we can harness the power of markets to drive investment and innovation in legal infrastructure research and design. We can also build up specialization in the knowledge of how legal infrastructure works and how it can be made to work better and we can get that information transmitted widely and systematically. No number of expert panels and no number of international agency reports can do that: “If we want smart ideas for how to deliver a stable, productive platform on which to build the more complex relationships of the global economy, we should be finding ways to get markets into the mix.”
For Hadfield, markets are clearly the answer, and just as clearly, governments are not. Governments cannot be “fixed” because the “production” of rules by governments is hamstrung by our “political, bureaucratic and judicial rule production methods.” Those methods promote, as well as thrive, on greater complexity in rule making. However, these “rule-making machines” don’t experience the cost of the complexity they produce. Further, most government agencies don’t face competition. They have little motivation to change how they do things because they won’t go out of business if they don’t. So, the bottom line is that we need the “iPhone for law,” something that hits the sweet spot between increased complexity costs and increased benefits. And the only way to get it is to figure out how to “get more markets into the legal infrastructure business.”
It is at this point that Hadfield takes a giant leap past mere regulatory competition. As the examples described at the beginning of this chapter evidence, there is nothing particularly new about regulatory competition, per se. It has occurred in different contexts, both historically and presently. In most cases, however, the competitors are not private actors, they are public ones. The most salient example is corporate law in the United States. While US companies can chose among the corporate laws of all 50 states as well as the District of Columbia and US territories, in each case the “competitor” for the company’s regulatory “business” is the government of that state/district/territory. That is, it’s a public agency or body of some kind.
Hadfield contends that not only are public rule-making and regulatory bodies hamstrung by their propensity for high levels of complexity resulting in high costs for businesses, but also, and perhaps worse, they lack resources. They do not have the financial, technical, or human resources to develop the completely new “legal infrastructure” that is required to adequately regulate today’s hyper-complex and hyper-connected global economy. Hadfield points in particular to artificial intelligence: “Regulating AIs, almost surely, will require almost as much if not more AI than the AI targets of regulation themselves.” For Hadfield, “our conventional approaches to producing regulation, exclusively through governments and public officials, are increasingly unable to cope with the levels of complexity and scale of some of our new technologies.”
Who does have those resources? Who is able to “cope” with such levels of complexity and scale? Self-regulation is not a better option than the government, Hadfield quickly confirms. Instead, for her, the answer is obvious: it’s the “garage guys.” Reincarnations of Google’s Sergey Brin and Larry Page, who have the technical skills, access to private capital, high appetite for risk, and ability to fail, are required. Private regulators, operating in a “market” for regulation, who are overseen “as necessary” by public regulators are what is needed.
An important element of this proposition, Hadfield emphasizes, is the prospect of profit (or, for the “philanthropically minded,” the prospect of social impact). She explains:
The key to a market-based approach to regulation is to create the potential for innovation and incentives to invest in smarter, more effective, and less expensive systems for meeting regulatory objectives. Private regulators that secure a larger market share and higher profits (or better returns on non-profit goals—the motive animating many nonprofit organizations such as private universities and hospitals) by offering a better regulatory service have powerful incentives to figure out how to achieve regulatory objectives more effectively at lower costs.
In the privatized regulatory world that Hadfield paints, private regulators would receive payment from the users of their private regulatory systems. That is, rather than a government subcontracting regulatory services to a private subcontractor (in the manner of private prisons, for example), instead a government would grant to a private regulator the right to offer private regulatory services, subject to defined rules and objectives. The users—the customers—of those services would pay the private regulator directly in order to have access to them.
England & Wales: Privatized or Independent?
Hadfield offers as an example of regulatory competition among private regulators the regulatory framework for legal services in England & Wales. (This framework is described in detail in chapter 4 of this book). She offers the nine approved regulators as “private nonprofit organizations.” Hadfield explains that each “private” regulator must demonstrate to the LSB (the oversight regulator) that it (the “private” regulator) meets the regulatory objectives set out in the Legal Services Act, and that the LSB monitors the performance of each “private” regulator as well as the legal system as a whole. Hadfield further explains that the LSB can create rules that the “private” regulators must follow, such as setting the maximum penalties that can be imposed, requiring a minimum number of lay persons on their governing bodies and forbidding interference from professional representative bodies/trade associations.
Hadfield lauds the regulatory framework for legal services in England & Wales as a “more intelligent approach to regulation, one focused on innovation, improving quality, and reducing costs.” She states that it puts England & Wales in “a much better position to meet the challenges of building better legal infrastructure for an increasingly complex world.” Most especially, she extols the framework of England & Wales as a “straightforward model for how other countries can keep up.” On these points, Hadfield is convincing.
However, upon reviewing the English/Welsh framework more carefully, the description of “private nonprofit” doesn’t seem to fit. Of the nine approved regulators, five have Royal Charters (the Law Society, the Chartered Institute of Legal Executives, the Chartered Institute of Patent Attorneys, the Chartered Institute of Trade Mark Attorneys, and the Institute of Charted Accountants in England and Wales), one was established by statute (the Council for Licensed Conveyancers), and one is a functionary in the office of the Archbishop of Canterbury (the Master of the Faculties).
The status of Royal Charter is principally reserved for professional institutions and charities that work in the public interest and that demonstrate “pre-eminence, stability and permanence” in their particular field. Organizations subject to Royal Charter may not freely amend their Charter or bylaws; the Charter may be amended only by the Queen in Council and certain amendments to the bylaws must be approved by the Privy Council (made up of all Cabinet Ministers and some junior ministries). In sum, chartered organizations surrender a significant amount of control over their internal affairs.
Further, the Legal Services Act requires all approved regulators (chartered or not) to act in a manner that is “transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.” While this list of requirements clearly encompasses a large variety of practices and behaviors, what is most relevant for our purposes here is that it operates to require each approved regulator to publicly report on its activities, and notably to publish its annual accounts.
Finally, and perhaps most significantly, the governors of each of the approved regulators (with the possible exceptions of the Costs Lawyer Standards Board and the ecclesiastical Master of the Faculties) are required to act in accordance with “The 7 Principles of Public Life,” issued by the Committee on Standards in Public Life. Previously referred to as the “Nolan Principles,” they apply to “anyone who works as a public office-holder.” The four principles most significant for our purposes read as follows:
Selflessness: Holders of public office should act solely in terms of the public interest;
Integrity: Holders of public office…should not act or take decisions in order to gain financial or other material benefits for themselves, their family or their friends. They must declare and resolve any interests and relationships;
Accountability: Holders of public office are accountable to the public for their decisions and actions and must submit themselves to the scrutiny necessary to ensure this.
Openness: Holders of public office should act and take decisions in an open and transparent manner. Information should not be withheld from the public unless there are clear and lawful reasons for doing so.
Taking all of the above into account, it appears that the approved regulators for legal services in England & Wales are not “private” as we commonly think of that term in the economic marketplace. They are perceived to be serving public functions. They are required to act in the interest of the public as a whole, to the exclusion of any private or personal interest.
It would be more accurate to describe each of these approved regulators as conforming to the OECD’s description of an independent regulator, as explained in chapter 1 of this book. While these regulators have sufficient autonomy to conduct their functions without political interference from the executive or legislature, at the same time their structures facilitate the alignment of their long term strategy and policy goals with the broad strategic national priorities as set by elected representatives in the executive and legislature.
In making the case for truly private regulation, Hadfield holds up the approved regulators of England & Wales as proof that her proposal can and does work. But the “garage guys” that Hadfield calls for in Rules for a Flat World would not be working “solely in terms of the public interest.” How could they be if, as Hadfield recommends, the prospect of profit (or of philanthropic social impact) and other enticements such as the protection of intellectual property, would be “dangled” in front of them? A number of public services have been privatized in the UK in recent years but the regulation of legal services is not one of them.
The US Experience with the Privatization of Public Services
The US has also privatized a number of public services in recent years. Hadfield mentions one in her book, the operation of prisons. She mentions it in passing, stating only that the private contractors operating private prisons were not “effectively” regulated. That leaves much unsaid about the US experience with the privatization of prisons:
The 1970s War on Drugs and harsher sentencing policies, including mandatory minimum sentences, fueled a rapid expansion in our nation’s prison population. Prisons became so overcrowded that you could have said, and some did, that they were “bursting at the seams.” Beginning with the Reagan Administration in the 1980s and then again with the Clinton Administration in the 1990s, the solution for the Federal Bureau of Prisons as well as a number of states was to contract with private companies to provide prison services. From 1999 to 2010, nationwide, in both federal and state prisons, the population of private prisons increased by 80% as compared to just an 18% increase in the prison population overall (private and public). The use of private prisons reached its peak in 2013, when approximately 15 percent of the federal prison population, or nearly 30,000 inmates, were in privately operated prisons.
Proponents of private prisons argued that public prisons had become “outmoded and obsolete.” Governments did not have the resources to renovate existing prisons or to build new ones to accommodate the burgeoning prison population. In addition, unlike public prisons, private prisons would not be “mired” in bureaucracy and red tape. Notably, unlike public agencies, private prison operators can hire and fire without the constraints of civil services, and they can discipline and reassign employees with far greater ease, especially if labor is not unionized. Further, proponents argued that private prisons would be more efficient. This was because public prisons have a monopoly, and as a result they have few incentives to develop more efficient methods or seek greater productivity. In contrast, because private prison operators compete in the private marketplace, they have every reason to seek greater efficiency, else lose money or go out of business. In sum, as regards public prisons, proponents argued that quality is low, prices are high, and supply has not kept up with demand: “Public sector corrections systems are in a state of chronic failure by any measure, and no other politically or economically feasible solution is on the table.”
What was the result of the US’s nearly 40-year experiment with private prisons? In August, 2016, US Department of Justice Deputy Attorney General Sally Yates announced that the Federal Bureau of Prisons would begin to reduce, with the intention of ultimately ending, the use of privately operated prisons. The Department made this decision on the basis of a report issued by the Office of the Inspector General that was highly critical of privately operated prisons. The report found that, as compared to federal public prisons, private prisons do not provide the same level of correctional services, programs, or resources, do not save substantially on costs, and do not maintain the same level of safety and security. Further, Yates noted that private prisons have struggled to replicate the rehabilitative services that public prisons provide: services such as educational programs and job training that are considered essential for reducing recidivism and improving public safety. (In February 2017 new Attorney General Jeff Sessions rescinded Yates’s announcement at the same time that the Trump Administration began enforcing strict immigration policies, including mass detention of undocumented immigrants).
The August 2016 report of the Office of the Inspector General was not by any means the first or the only report highly critical of privately operated prisons. For example, a 2012 report prepared for The Sentencing Project found that there is no evidence that privately operated prisons are more cost effective than publicly operated ones. Complicating cost comparisons, the report explained, was the fact that private prisons tend to cherry pick the less expensive prisoners (low or medium levels of security), leaving the more expensive ones (high security/ high risk) for public prisons. The report also found that there is high staff turnover in private prisons, which was attributed to lower salaries and shorter training periods as compared to public prisons. The report observed that the rate of assaults in private prisons is significantly higher than in public prisons and attributed this fact, at least in part, to high staff turnover. In sum, public prisons were found to be safer as compared to private ones because “privately operated prisons appear to have systemic problems in maintaining secure facilities.” The report also found that many privately operated prisons fail to provide adequate medical care.
The report explains that the operators of private prisons themselves do not hold out greater efficiency as a cornerstone to their business models. At least one private company has described that its potential for growth instead depends upon “factors we cannot control,” such as “crime rates and sentencing patterns in various jurisdictions,…the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws.” They see their growth—and their profits—as dependent in large part if not in whole upon a greater number of persons entering the incarceration system.
Further, even if a private prison operator might suggest that the number of persons entering the incarceration system is something it cannot control, that hasn’t stopped private operators from trying to influence it. As The Sentencing Project report explains, private prison operators spend heavily on lobbying as well as on campaign contributions to both state and federal candidates. Their efforts have gone toward not only promoting the use of private prisons, but also increasing the nation’s prison population (such as through strict immigration laws), and seeking to block unfavorable bills, such as those that would put private prisons under the jurisdiction of the Freedom of Information Act. Congresswoman Sheila Jackson Lee of Texas sought no fewer than six times to make private prisons subject to the same federal public records laws as public prisons. Private prison operators lobbied strongly against her bill each time. Those in the House of Representatives who opposed Lee argued that such a requirement would set a “dangerous precedent” of applying public record law to private companies, and would raise the cost of private contractors by increasing legal fees and record-keeping staff. Lee’s bill failed each time, with the result that our information about how private prisons are run and what happens inside their walls is still limited.
The problems in the private prisons demonstrate that they do not operate better than government operated ones do. They are not more efficient, and the possibility of profit has not enticed private operators to create better prisons, much less a better system of incarceration. Instead, private prison operators have a highly perverse incentive: to seek to increase the number of incarcerated persons in a country which already has the highest incarceration rate in the world. Private prisons do not operate in the public interest and make no pretense of doing so. They operate exclusively in the interest of their shareholders, and they do so to the detriment of inmates and the public as a whole.
The situation with respect to privatization of another public service, water, is not much different: During most of the 1800s, most of the US population (94%) was supplied primarily by private water companies. However, between 1880 and 1920 the majority of the country’s large cities moved to public systems and the rest of the country followed; By the 1990s, just 15% of the market was supplied by private companies. The shift to public systems was prompted by a number of problems attributed to private companies: the outbreak of diseases due to contaminated water, the inability to fight fires due to low water pressure, and the failure on the part of private companies to supply low-income areas.
Over the course of the 20th century, the country’s mostly public water providers grew to provide potable water to more than 99% of the country. In doing so, however, they failed to adequately maintain their infrastructure, with the result of water main breakage and leakage being common place around the country. There are an estimated 240,000 breaks and an estimated 7 billion gallons in leakage, per year. Due to aging infrastructure, the pipes are literally bursting at the seams. And they are not only bursting, but in some places in the country they carry contaminated water that is poisoning local populations (prominent examples being Flint, Michigan and East Chicago, Indiana). The reason for the failure to maintain the infrastructure is lack of resources. In particular, from 1977 to 2009, federal grants for water and sewer systems fell by 75% (after accounting for inflation). This left the financial burden, estimated to be between $655 billion and $1 trillion to restore the infrastructure nationwide,  on the shoulders of local water authorities. They have been reluctant to raise rates, in part for fear of political backlash, and also because, in low income areas, residents can ill-afford to pay.
In some municipalities, the response was to privatize the water system. In the 1990s, many made the switch, including, for example, cities like Atlanta, Indianapolis, and Tampa Bay, and a number of municipalities in states like New Jersey, Pennsylvania, California and Illinois. Proponents of privatization argued that private companies have easier access to capital markets for infrastructure investment and can borrow at better interest rates. In addition, they offer measurable efficiency gains—as much as one-third more. “Profitability dictates that a system be as efficient as possible so that it can be as profitable as possible.”  Further, private companies are less bureaucratic and they are “demonstrably ahead of government owned utilities in terms of technology and state-of-the-art practices.” While such technologies may have a higher initial cost, they offer savings, too, it was argued, “which can be shared with customers while improving service and quality.”
What has been the result of the country’s most recent experience with the privatization of water? Between 2002 and 2014, no fewer than 33 municipalities in the US chose to “remunicipalize” their water systems by taking them back under public control. A number of reports explain the reasons for this: Privatization has resulted neither in increased infrastructure investment, nor in increased private financing. Private water companies have instead preferred to use public investment finance (government loans and bonds), which are considered to be less costly than private finance. Further, in lobbying Congress for access to federal funding, private companies have made it more difficult for public systems to access federal funding. Private water companies have not been shown to operate more efficiently than public ones. Also, in many cases privatization has led to increased costs, as a result of profit requirements, dividends, income taxes, executive compensation, and the mere complexities involved in negotiating a privatization and then monitoring it once it’s in place.
Further, there is no evidence that privatization has led to better water quality: Not only do private water companies actively lobby Congress and the Environmental Protection Agency to refrain from adopting higher quality standards, but there are a number of examples where privatized systems (including Atlanta’s and Indianapolis’s) have produced inferior if not contaminated water that has required boiling before use. Additionally, private companies tend to cherry pick the localities they will service, avoiding economically depressed areas where household income is low, where water quality problems are significant, or where repair and maintenance of the infrastructure would be particularly expensive. Finally, private water companies have successfully lobbied against bills that would require them to be more transparent in their operations, notably to require them to submit quarterly and annual reports, to alert users in the event of a request to increase rates, or to provide more information in the event of boil-alert notices.
In sum, there is no evidence that the privatized water systems are superior to public ones and in a number of instances they have proven to be worse.
Let’s look at one more example of the privatization of a public service in the United States: primary and secondary education. For many years, a number of people have argued that many of our country’s public schools are in trouble: they don’t have the resources they need to provide quality education; without competition, they have no incentive to operate efficiently; they aren’t able to innovate (some are even “technologically backward”); they are mired in bureaucracy; their class sizes are too large and their facilities are so overcrowded, they are “bursting at the seams.” In sum, they argue, our public schools are failing.
Several states have responded by creating a voucher system in which parents can use publicly-funded credits to send their children to the private school of their choice. In essence, it is the use of public money to finance private schools. The first modern voucher program was implemented in Milwaukee in 1990; since then approximately 15 states plus the District of Columbia have adopted a school voucher program in some form.
Advocates of school voucher programs argue that they give parents choice about where they send their children to school, and notably they enable students from low-income families to escape “failing” schools. They create needed competition among schools, forcing the “failing” public ones either to improve or close. They increase the quality of public schools as well as increasing the quality of schools available overall. They enable more efficient spending of public money. They enable schools to experiment with innovation.
What is the result of the country’s nearly three decade experiment with school vouchers? A number of studies come to the same conclusions: School voucher programs have limited to no effect on student achievement, and in a number of cases they have had a negative effect. The level of regulatory oversight exercised over a private school did not seem to make a difference because if a school was sanctioned for poor academic performance, performance did not improve. In some areas, student achievement did improve in public schools at the time a voucher program was implemented, but researchers ascribe most if not all of that improvement to increased public accountability measures that were put in place at the same time as the voucher program. In addition, there is no evidence that school voucher programs have led to greater innovation: notably, the vouchers have benefitted many pre-existing religious schools (especially Catholic and also Islamic), some of which had seen dramatic drops in enrollment just prior to the implementation of the program. There is no evidence that any private school, subsequent to entering a voucher program, has developed any curriculum or teaching method that could be described as “innovative” in any effective manner, and there is no convincing evidence that voucher programs have reduced racial segregation in schools. Further, there is no evidence that vouchers have resulted in more “efficient” spending of public funds. There are, however, a number of examples of self-dealing, fraud and embezzlement of public funds by private schools participating in voucher programs.
Finally, private schools that benefit from voucher programs have limited accountability and transparency. Notably, in most cases they are not obliged to disclose the subjects they teach, the experience or qualifications of their teachers, or their students’ performance outcomes (besides the results of an annual standardized test). Most especially, most such schools are not accountable for how they spend public funds, and, in many cases, nor are they required to disclose their accounting or have it subject to audit. Proponents of voucher programs actively lobby against greater accountability and transparency on the grounds that it would re-create the bureaucracy of public schools and restrict them from being “creative in the classroom and more open to trying different approaches.” For them (proponents of voucher programs and other forms of privatization of public education, like charter schools), sole accountability should lie with parents: if they don’t like a school, they can simply remove their child from it.
In sum, there is no evidence that the privatization of public education has been beneficial for American children, and in many cases it has been detrimental.
There is a definite pattern in these examples of privatization of public services. Proponents of privatization in each case complained of the bureaucracy and inefficiency of the government. Because the government had a monopoly, it had no motivation to strive to improve its service. Further, proponents of privatization observed that demand was so great, the service was “bursting at the seams.” Yet, also in each case, they asserted that government did not have the resources to meet the demand. On the other hand, private enterprises did. They had greater access to capital and to expertise. Privatization, it was argued, would result in greater innovation. Freed of bureaucracy and motivated by the possibility of profit, in each case private enterprises would develop innovative services that would better meet the needs of the public (themselves transformed into customers). Faced with competition, they would be forced to operate as efficiently as possible. The end result would—necessarily—be greater innovation and choice, better quality, and greater customer satisfaction.
Except that’s not how it turned out. Not in any case. There is no convincing evidence that the privatization of these public services (prisons, water, schools) has resulted in greater innovation, higher quality, or increased efficiency. There is evidence of service failures. There is evidence of many unsatisfied customers. There is evidence of perverse incentives. There is evidence of fraud, conflicts of interest, and self-dealing. There is evidence not just of lack of accountability and transparency, but of active and strong resistance to both. In each case, there is scant to no evidence that the privatization of the public service has, on the whole, actually benefitted the public.
In Rules for a Flat World, Hadfield states that her proposal to privatize regulation is “not as crazy as it sounds.” She continues, “In fact, there’s a story to be told that this is just the natural next step in the evolution of human systems for managing complexity.” If you consider her proposal in the context of the privatization of other public services, notably of prisons, water and education, then she is right that the privatization of regulation is the “natural next step” in a story of progression towards the privatization of a greater number of public services in the US. But is it a step we want to take?
Clearing Up Confusion and Calling Out Contradictions
It is important not to confuse regulatory competition with the privatization of regulation. As discussed above, regulatory competition has occurred historically and continues to occur today in a number of contexts, including the regulation of legal services in England & Wales. However, in most if not all cases, it occurs among public regulators, all under an obligation to act in the public interest. Hadfield recommends the greater use of regulatory competition, but she goes one giant step further: that such competition should be among private actors, motivated by profit (or, in the event of a nonprofit, by the ability to have a social impact).
It is also important not to confuse alternative structures (the focus of this book in your hands) with the privatization of regulation. Alternative structures, and the larger issue of ending the lawyer monopoly on legal services, relate to private actors already acting in an existing, already long privatized, market for legal services. The argument for alternative structures is an argument to open up that market—already serviced by private actors—to a greater variety of private actors. Alternative structures and ending the lawyer monopoly on legal services are fundamentally about access to justice and equal protection of the law. If lawyers are not able or willing to meet 100% of our country’s needs for legal services, then they need to get out of the way—they need to stop blocking others who would like to step up and try meet some of those unmet needs.
In stark contrast (and with the exception of self-regulation), regulation today concerns nearly exclusively public actors, acting mostly in the absence of any kind of “market” (or, as advocates for the privatization of public services would put it, acting in a near-monopoly situation). Further, the proposal to privatize regulation concerns the regulation of not just legal services, but of potentially anything that is or could be regulated by public bodies today. (The specific examples in Rules for a Flat World relate to contracts, business organizations, employment and consumer law). Hadfield describes her book as bringing out “the critical question of how we build and implement the legal infrastructure we need for a new complex and more inclusive global economy.” Seen from this economy-focused perspective, the privatization of regulation is not fundamentally about access to justice or equal protection of the law, but about facilitating business transactions and maximizing profit.
Hadfield correctly points out that today our public regulatory bodies do not have the resources they need to regulate effectively. But she appears to accept this lack of resources as an immutable fact that she does not question. It is as if their lack of resources has resulted from an act of god—not man, and certainly not from the policies of “small government” and minimal taxation adopted by our elected politicians—it is as if it were something we have no power to change. That is simply not the case. With every election we have the power to change it.
Or, at least, in a democracy, we would. Today many argue that the United States is no longer a democracy. This is in large part, they argue, because of the inordinate power that private companies now have in our political and regulatory processes.  A 2014 study conducted by Martin Gilens and Benjamin Page found that Americans do enjoy certain features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if contested) franchise. However, on the basis of their empirical research, Gilens and Page conclude that these “features” today do not translate into political power for ordinary American citizens. To the contrary, they found that majorities of ordinary citizens have little influence over the policies that government adopts. Instead, the actual power to shape both political agendas (what issues are considered) as well as policy outcomes (the decisions made with respect to those issues) is nearly entirely controlled by “economic elites” and organized groups representing business interests. They further found that while occasionally the interests of majorities of American citizens and the interests of economic elites and business interests align, this is rarely the case. And when they do not align (which, again, is nearly always), the citizen majority loses.
It is in this context that the proposal to privatize regulation can in fact be seen as a proposal to transfer political processes along with government itself directly to business interests, eliminating the need to bother with the “bureaucratic” (and only ostensibly democratic) institutions of legislatures, executives and courts. Proponents of the proposal would likely object to this depiction, and argue that there is nothing political in the privatization of regulation. But how can that be, when the proposal entails transferring to private business entities, operating for a profit, the power both to make and to enforce rules that govern our society? What is politics and what is government, if not, at their very core, the making and the enforcement of rules that govern our society?
Hadfield argues that “voters” would be protected from bad private regulators because they can (and should) expect governments to exercise sufficient regulatory oversight over private regulators. In fact, the argument goes, this would place voters in an even better position because while it is “demanding” to expect voters to actively evaluate how government regulators are regulating individual businesses, it is “less demanding” to expect voters to merely evaluate how government regulators are regulating how private regulators regulate individual businesses. However, this argument is undermined if not contradicted by other arguments, and notably by one stating that using the vote as means to get government regulators to pay attention to your needs as a voter “is a blunt instrument at best.” It is much better, Hadfield argues, to be able to sue a private regulator when it fails to “fund [its] courts adequately and it takes a year to get a court date,” or “it costs you millions in e-discovery costs to litigate your case.”
If the privatized “court” who is earning a profit from adjudicating your lawsuit isn’t doing a good job, your “better” solution is to instigate a second lawsuit? This time you should sue in front of a public court which is already under-resourced and which will likely be even further starved of resources as a result of privatization?
There are additional contradictions. Hadfield frequently emphasizes the importance of a competitive regulatory market in order for private regulation to work. She states that this will depend upon a “slew of laws:” antitrust to protect against monopolies, financial regulation to assure access to capital, internet rules to assure access to communication infrastructures, etc. In this privatization scenario, it is extremely important for public regulators to oversee private regulators—to assure that private regulators are respecting those laws and are otherwise meeting the targets government has set for them. Hadfield states “relying on market-based private regulators will be only as effective and attractive as the quality of the government oversight of the system. She also states that regulating private regulators will “almost certainly be a new and substantial challenge for governments.” However, governments already don’t have the resources they need to regulate effectively, and this is presented as an immutable fact. Where will governments find the additional resources to effectively regulate private regulators? Hadfield offers scant assurance on this point, stating merely that “there are good reasons to think” that privatized regulation will place lower demands on governments, but only in “several settings,” not all of them. The failure to address this need for additional public oversight and how to fund it is highly troublesome.
The proposal is troubling in another manner. Hadfield argues that in order to induce private companies to make investments in the development of better regulation, their ideas and inventions should be protected. This could be with a patent or copyright, or by allowing the private company to maintain secrecy, further protected by confidentiality agreements and trade secret laws. This element, alone, turns the entire concept of regulation on its head. How can regulation fulfill its very reason of existence—to serve the public interest—if it can be kept secret? If it can be considered to be “private” property protected by intellectual property laws and accessible only to those able to pay the “market” rate to access it? If the owner of the “private” property could be permitted, at its discretion, to keep it secret, with the right to refuse to grant access to any one or more persons at any price? This element flies in the face of the United Nations 2030 Agenda for Sustainable Development, under which the United States has committed, among other things, “to develop effective, accountable and transparent institutions at all levels.” 
Further, the privatization of regulation would represent a significant step backwards in a nation- and world-wide movement to establish free access to law and legal information. The Declaration on Free Access to Law affirms: that public legal information from all countries and international institutions is part of “the common heritage of humanity;” that maximizing access to this information promotes justice and the rule of law; that public legal information is “digital common property” and should be accessible to all on a non-profit basis and free of charge; and that organizations (such as legal information institutes) have the right to publish public legal information and the government bodies that create or control that information should provide access to it so that it can be published by other parties. By operating to privatize what had previously been public legal information and by protecting that information with intellectual property and trade secret laws, we would reject outright these affirmations. We would destroy the “common heritage of humanity,” and we would make law—and thereby justice itself—that much more difficult and expensive to access.
The proposal to privatize regulation has another troubling aspect. Hadfield explains how there is an “economic demand” for law because of the protection that it offers businesses. As a hypothetical, she paints a picture for a business in a world with “lousy legal infrastructure.” In this world, employees and other businesses have no reliable identification or addresses, there are no reliable credit-rating agencies, there are no courts (and notably no courts that can’t be bribed by those richer and better connected), no one answers the 911 call when the business’s computers are stolen, the business can’t find an internet provider because its competitors have entered into exclusive contracts with all of them, and government representatives insist the business owes many thousands of dollars in back taxes that in fact were already paid.
Having painted this picture, Hadfield rightfully explains that we need rules—that we need law. She rightfully points out that rather than objecting to rules, and seeking to avoid them, we should be happy for their existence and, especially, we should appreciate and be glad for how our “legal infrastructure” protects us.
Indeed, the protection laws offer to us—to each of us, equally—is considered to be so important that it is enshrined in the Constitution. Specifically, the 14th Amendment, ratified in 1868 in the wake of the Civil War, forbids any state as well as local government from denying to any person within their jurisdiction the equal protection of its laws. The impetus for this amendment was to assure that states, including states of the former Confederacy, would act to protect the civil rights of all its citizens, including former slaves. It has since been applied on a much broader basis, and in particular it has been used to protect businesses from arbitrary or discriminatory state actions. The amendment applies only to state (government) actors; it does not apply to private actors.
There is irony in stressing the importance of the protections that law offers to us. This is because privatized regulation has the potential of significantly if not drastically reducing the application of the 14th Amendment by reducing the application of all our rules and processes to all citizens on an equal basis. Indeed, it will leave certain citizens—perhaps many—without the protection of any law or process, depending upon the “setting.” This is because rules and processes previously adopted by public actors would instead be adopted and enforced by private actors. As private actors, they would be free to exclude persons from the application—protection—of their rules and processes. In particular, they would be free to exclude those unable to pay “market” price. If that occurs, those persons would have no choice but to fall back upon public rules and processes. But those would necessarily be inferior to the private ones, given that, as Hadfield points out, governments do not have the resources they need to effectively regulate. It is also quite possible that, as noted above, public regulators would be even further starved of resources on the assumption that they didn’t need any since private regulators were on the scene. In that event, it is quite possible that, depending upon the “setting,” there would no longer be any applicable public law or process, with the result that persons unable to pay the “market” rates for private regulation would lose all protection of the law.
In a “pay to play” scenario, Hadfield describes a situation when a hypothetical private, for profit regulator would need a ruling from a California court before the private regulator is able to continue with its own regulatory process, but where the California court might take a long time to issue such a ruling. Hadfield’s recommendation for a “really smart” private regulator to get around this problem is that it “make arrangements” with the California courts to get quick rulings, and that it pay the courts for that fast-track service. This suggestion ironically echoes Hadfield’s description of a “lousy legal infrastructure” where courts can be bribed by those richer and better connected, and it exacerbates the failure of law to provide equal protection for all citizens.
Our country’s experiences with the privatization of prisons, water and education show us that the privatization of a public service is unlikely to benefit the public. There is no reason to believe that the privatization of another, crucial, public service—regulation—would have better results. If Hadfield’s proposal were to be adopted in the manner she proposes and function in the manner she predicts, it would result in a regulatory dystopia where: decisions that concern society as a whole that were formerly made by at least ostensibly democratic institutions would instead be made by private companies seeking to maximize profit and shareholder value; where rules and processes that concern society as a whole can be kept secret, or made available only upon payment of “market” price; and where at least some persons and possibly many lose their right to equal protection under the law. It would turn citizens of a democracy into mere customers of a corporate state.
Hadfield is wholly correct in her observation that we desperately need better regulation—not just for legal services (the focus of this book) but in many if not all other domains. However, if regulation is a public service—if it is something that we as a society need and value because it brings economic as well as social value to everyone—then it cannot be financed or developed privately. It must be financed publicly through equitable, progressive revenue sources, and it must be developed by public, democratic processes. Are the processes messy? Certainly they are. But, to quote Colin Crouch, “we are enmeshed in needs for collective and public goods. To seek to wriggle out from the challenges that this presents is to wriggle out of being human.”
In the spirit of the rest of this book, it makes sense to examine the extent to which the proposal to privatize regulation would, if implemented, correspond to the OECD’s six essential elements of an effective regulatory policy. For each element, the response lies upon a spectrum, from “yes,” “for the most part,” “sort of,” “limited,” “not really,” and “no:”
Table 27.1: Assessment for Privatized Regulation (as proposed in Rules for a Flat World)
Click on table to enlarge.
This chapter is an excerpt from Modernizing Legal Services in Common Law Countries: Will the US Be Left Behind? To learn more about the book, please click here.
 Hadfield, Rules for a Flat World, 48-54, 335-340.
 Hadfield, “The Cost of Law.”
 Hadfield and Heine, “Life in the Law-Thick World.”
 Hadfield, “Legal Barriers to Innovation.”
 Hadfield, “Legal Infrastructure and the New Economy.”
 Hadfield, Rules for a Flat World, 219-245.
 Ibid., 130.
 Ibid., 169-175.
 Ibid., 176-185. See also Hadfield and Heine, “Life in the Law-Thick World.”
 Hadfield, Rules for a Flat World, 185-194.
 Ibid., 194-195.
 Ibid., 199.
Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, New Jersey: Princeton University Press, 2012); George Monbiot, “Neoliberalism – The Ideology at the Root of all Our Problems,” The Guardian, April 15, 2016, https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot.
 Hadfield, Rules for a Flat World, 199-205.
 Ibid., 205-207.
 Ibid., 207-212.
 Ibid., 247.
 Ibid., 228, 248.
 Ibid., 248.
 Ibid., 269.
 Ibid., 250, 260-277.
 Ibid., 245, 267.
 Ibid., 245.
 The Law Society, “Our Constitution,” https://www.lawsociety.org.uk/About-us/our-constitution/; CILEx, “Royal Charter,” https://www.cilex.org.uk/about_cilex/who_we_are/royal-charter; CIPA, “About Us,” http://www.cipa.org.uk/about-us/about-us/; CITMA, “The Making of Our Royal Charter,” https://www.citma.org.uk/about_citma/royal_charter/making_our_royal_charter; ICAEW, “Charter and Bye-laws,” http://www.icaew.com/en/about-icaew/who-we-are/charter-and-bye-laws; Administration of Justice Act 1985, Art. 28, http://www.legislation.gov.uk/ukpga/1985/61/section/12; The Faculty Office, “About the Faculty Office & Our History,” http://www.facultyoffice.org.uk/about-us/ (all accessed March 20, 2017).
 See Privy Council: “Royal Charters,” https://privycouncil.independent.gov.uk/royal-charters/; “Charted Bodies,” https://privycouncil.independent.gov.uk/royal-charters/chartered-bodies/; “Privy Council Members,” https://privycouncil.independent.gov.uk/privy-council/privy-council-members/ (all accessed March 20, 2017).
 Legal Services Act of 2007, Art. 28, http://www.legislation.gov.uk/ukpga/2007/29/pdfs/ukpga_20070029_en.pdf.
 See: (1) Solicitors Regulation Authority, SRA Governance Handbook, January, 2015, 44; (2) Constitution of the Bar Standards Board as amended 12 November 2011, 4, 10, 14-15; Standing Orders for the Bar Standards Board, January 26, 2017, 3, https://www.barstandardsboard.org.uk/media/1818467/bsb_standing_orders_2017__approved_january_2017_.pdf; (3) CILEx Regulation, “Code of Conduct for Board Members,” last reviewed January 2015, http://www.cilexregulation.org.uk/~/media/pdf_documents/cilex-regulation/code-of-conduct/code-of-conduct-for-board-members.pdf?la=en; CILEx Regulation, “Applicants for Membership of the Disciplinary Tribunal and Panels: Application Pack,” undated, 5-6, http://www.cilexregulation.org.uk/~/media/pdf_documents/cilex-regulation/vacancies/professional_conduct_panel_lay_member/panel-and-tribunal-pool-members-application-pack.pdf?la=en; (4) Council for Licensed Conveyancers, “Professional Member of the Council,” undated, 5-6, http://www.conveyancer.org.uk/CLCSite/media/Current-Vacancies/Professional-Member-of-Council-Candidate-Pack.pdf; (5) IPReg, “Promotion of the Regulatory Objectives Policy Statement,” undated, 9, http://ipreg.org.uk/wp-content/files/2012/09/Promotion-of-the-Regulatory-Objectives-Policy-Statement-LSB.pdf; The Patent Regulation Board and Trade Mark Regulation Board, “Minutes,” November 27, 2014, 7, 9, http://ipreg.org.uk/wp-content/files/2012/09/Minutes_November_2014_Board_Meeting_and_supporting_papers-_website.pdf; (6) ICAEW, “Probate Committee Terms of Reference,” undated, 2, https://www.icaew.com/-/media/corporate/files/members/regulations-standards-and-guidance/reserved-legal-services/20-terms-of-reference-for-the-probate-committee.ashx?la=en.
 Committee on Standards in Public Life, “Striking the Balance: Upholding the Seven Principles of Public Life in Regulation,” September, 2016, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/554817/Striking_the_Balance__web__-_v3_220916.pdf; see also Committee on Standards in Public Life, “The 7 Principles of Public Life,” accessed March 1, 2017, https://www.gov.uk/government/publications/the-7-principles-of-public-life/the-7-principles-of-public-life—2.
 OECD Being an Independent, 41.
 Hadfield, Rules for a Flat World, 248.
 For an interesting discussion of the privatization of public services in the UK, see Colin Crouch, The Knowledge Corrupters: Hidden Consequences of the Financial Takeover of Public Life (Cambridge, UK: Polity Press, 2016), 97-127.
 Hadfield, Rules for a Flat World, 271, 277.
 J.C. Oleson, “The Punitive Coma,” California Law Review 90 (2002): 846, http://dx.doi.org/doi:10.15779/Z38HH7S; Sacramento Bee and Andy Furillo, “California’s Prisons Bursting at Seams and Understaffed,” East Bay Times, November 26, 2005, http://www.eastbaytimes.com/2005/11/26/californias-prisons-bursting-at-seams-and-understaffed/; Illinois Criminal Justice Information Authority, “Blueprint for the Future: Final Report of Trends & Issues for the 1990s,” January, 1991, 38.
 Cody Mason, “Too Good to Be True: Private Prisons in America,” report prepared for The Sentencing Project, January, 2012, 1, http://sentencingproject.org/wp-content/uploads/2016/01/Too-Good-to-be-True-Private-Prisons-in-America.pdf.
 Sally Q. Yates, “Phasing Out Our Use of Private Prisons,” The United States Department of Justice, August 18, 2016, https://www.justice.gov/opa/blog/phasing-out-our-use-private-prisons.
 Joseph Shannon Gregson, “Comparing Public and Private Prison Systems,” Paper presented to the Public Administration Faculty at the University of Michigan-Flint In Partial Fulfillment of the Requirements for the Master of Public Administration, Fall, 2000, iv, 2, 4, 16, https://deepblue.lib.umich.edu/bitstream/handle/2027.42/117712/Gregson.pdf?sequence=1&isAllowed=y.
 Matt Zapotosky and Chico Harlan, “Justice Department Says It Will End Use of Private Prisons,” The Washington Post, August 18, 2016, https://www.washingtonpost.com/news/post-nation/wp/2016/08/18/justice-department-says-it-will-end-use-of-private-prisons/?amp;tid=ss_tw&utm_term=.57f0149acafa&postshare=9221471534255226&utm_term=.0b4001c3b3f9.
 Office of the Inspector General, US Department of Justice, “Review of the Federal Bureau of Prisons’ Monitoring of Contract Prisons,” August, 2016, https://oig.justice.gov/reports/2016/e1606.pdf#page=2.
 See, for example, New York Times Editorial Board, “Under Mr. Trump, Private Prisons Thrive Again,” New York Times, February 24, 2017, https://www.nytimes.com/2017/02/24/opinion/under-mr-trump-private-prisons-thrive-again.html?_r=0; Justin Carissimo, “Jeff Sessions Reverses Obama Order to Phase Out Private Prisons,” Independent, February 23, 2017, http://www.independent.co.uk/news/world/americas/jeff-sessions-signals-support-for-private-prisons-a7596661.html.
 Mason, “Too Good to Be True,” 6-8, 10; see also In the Public Interest, “How Privatization Increases Inequality,” September, 2016, 40-42, https://www.inthepublicinterest.org/wp-content/uploads/InthePublicInterest_InequalityReport_Sept2016.pdf.
 Mason, “Too Good to Be True,” 11, quoting Scott D. Camp and Gerald G. Gaes, “Growth and Quality of U.S. Private Prisons: Evidence from a National Survey,” paper prepared for Federal Bureau of Prisons, Office of Research and Evaluation, September 21, 2001, 16, https://www.bop.gov/resources/research_projects/published_reports/pub_vs_priv/oreprres_note.pdf.
 Mason, “Too Good to Be True,” 11-12; See also, for example, Linda Greenhouse, “Outsourcing the Constitution,” New York Times, March 1, 2017, https://www.nytimes.com/2017/03/01/opinion/outsourcing-the-constitution.html.
 Mason, “Too Good to Be True,” 12.
 Ibid., 13-16.
 Christie Thompson, “Everything You Ever Wanted to Know About Private Prisons…is None of your Damn Business,” The Marshall Project, December 18, 2014, https://www.themarshallproject.org/2014/12/18/everything-you-ever-wanted-to-know-about-private-prisons#.nQOGdI8Gw; Mike Tartaglia, “Private Prisons, Private Records,” Boston University Law Review 94 (2014): 1689-1744, http://www.bu.edu/bulawreview/files/2014/10/TARTAGLIA.pdf.
 Michelle Ye Hee Lee, “Yes, U.S. Locks People Up at a Higher Rate than Any Other Country,” The Washington Post, July 7, 2015, https://www.washingtonpost.com/news/fact-checker/wp/2015/07/07/yes-u-s-locks-people-up-at-a-higher-rate-than-any-other-country/?utm_term=.854bffd0aa07.
 Clint Smith, “Why the U.S. Is Right to Move Away from Private Prisons,” The New Yorker, August 24, 2016, http://www.newyorker.com/news/news-desk/why-the-u-s-is-right-to-move-away-from-private-prisons.
 Committee on Privatization of Water Services in the United States, National Research Council, Privatization of Water Services in the United States: An Assessment of Issues and Experience (Washington, DC: National Academy Press, 2002), 30-32, https://doi.org/10.17226/10135; Center for International Environmental Law, “The Ebb and Flow of the Water Privatization Debate Briefing Paper for the Fourth World Water Forum,” March 2006, 2, http://www.ciel.org/Publications/EbbFlow_Mar06.pdf; Food & Water Watch, “The State of Public Water in the United States,” February, 2016, 3-4, http://www.foodandwaterwatch.org/sites/default/files/report_state_of_public_water.pdf.
 “America’s Neglected Water Systems Face a Reckoning,” Knowledge@Wharton, June 10, 2015, http://knowledge.wharton.upenn.edu/article/americas-neglected-water-systems-face-a-reckoning/; Alana Semuels, “Aging Pipes Are Poisoning America’s Tap Water,” The Atlantic, July 29, 2015, https://www.theatlantic.com/business/archive/2015/07/dont-drink-the-water/399803/; Michael Hawthorne, “EPA Warns of Lead in Water in East Chicago,” Chicago Tribune, March 2, 2017, http://www.chicagotribune.com/suburbs/ct-east-chicago-lead-water-20170302-story.html.
 United States Government Accountability Office, “Water Infrastructure: Information on Selected Midsize and Large Cities with Declining Populations,” Report to the Ranking Member, Subcommittee on Environment and the Economy, Committee on Energy and Commerce, House of Representatives, September, 2016, 2, http://gao.gov/assets/680/679783.pdf; American Water Works Association, “Buried No Longer: Confronting America’s Water Infrastructure Challenge,” February 27, 2012, 10, http://www.awwa.org/Portals/0/files/legreg/documents/BuriedNoLonger.pdf.
 America’s Neglected Water Systems Face a Reckoning,” Knowledge@Wharton; Maude Barlow and Wenonah Hauter, “The Dangerous Return of Water Privatization,” Utne Reader, January/February 2014, http://www.utne.com/politics/water-privatization-zm0z14jfzros?pageid=2#PageContent2.
 Committee on Privatization of Water Services, Privatization of Water Services, 17, 20-21, 24; Shiney Varghese, “Privatizing U.S. Water,” paper prepared by the Institute for Agriculture and Trade Policy Trade and Global Governance Program, July, 2007, 2-3, http://www.iatp.org/files/451_2_99838.pdf.
 Edwin S. Rubenstein, “The Untapped Potential of Water Privatization,” A Hudson Institute Report for American Water Works, Inc., October, 2000, http://www.esrresearch.com/Theprivatewaterindustry.htm.
 “Are We Better Off Privatizing Water?” Wall Street Journal, October 8, 2012, https://www.wsj.com/articles/SB10000872396390443816804578002280926253750; Rubenstein, “The Untapped Potential of Water Privatization.
 Crystal Lombardo, “Water Privatization Pros and Cons,” Vision Launch, January 7, 2015, http://visionlaunch.com/water-privatization-pros-and-cons/#.
 Rubenstein, “The Untapped Potential of Water Privatization.”
 “Are We Better Off Privatizing Water?” Wall Street Journal.
 Emanuele Lobina with Corporate Accountability International, “Troubled Waters: Misleading Industry PR and the Case for Public Water,” November, 2014, 18, https://www.stopcorporateabuse.org/sites/default/files/resources/troubledwaters_webres.pdf; see also Food & Water Watch, “The State of Public Water in the United States,” 5-6.
 David Gordon, “An Analysis of the Privatization of Drinking Water Facilities in the United States,” Masters project submitted in partial fulfillment of the requirements for the Masters of Environmental Management degree in the Nicholas School of the Environment of Duke University, May, 2011, 2, 40-49, http://dukespace.lib.duke.edu/dspace/bitstream/handle/10161/3708/Gordon_David_Final_MP.pdf;sequence=1; Lobina, “Troubled Waters,” 16.
 Lobina, “Troubled Waters,” 16, 22-24; Food & Water Watch, “Water Privatization: Facts and Figures,” August 31, 2015, http://www.foodandwaterwatch.org/insight/water-privatization-facts-and-figures; Public Citizen, “Top 10 Reasons to Oppose Water Privatization,” undated, 2, https://www.citizen.org/documents/Top10-ReasonsToOpposeWaterPrivatization.pdf.
 Craig Anthony Arnold, “Water Privatization Trends in the United States: Human Rights, National Security, and Public Stewardship,” William & Mary Environmental Law and Policy Review 33 (2009): 803, http://scholarship.law.wm.edu/wmelpr/vol33/iss3/4/; see also Lobina, “Troubled Waters,” 10-12.
 Food & Water Watch, “The State of Public Water in the United States,” 7; Food & Water Watch, “The Public Works How the Remunicipalization of Water Services Saves Money,” December, 2010, http://www.foodandwaterwatch.org/sites/default/files/The%20Public%20Works%20FS%20Dec%202010.pdf.
 Sara Ehrhardt and Maude Barlow, “A Debate on Water Privatization,” Part Six, Grist, July 17, 2004, http://grist.org/article/barlow2/; Public Citizen, “Top 10 Reasons to Oppose Water Privatization,” 2.
 Jon R. Luoma, “Water for Profit,” Mother Jones, November/December, 2002, http://www.motherjones.com/politics/2002/11/water-profit; Corporate Accountability International, “Public Water Works! The Case for Prioritizing our Most Essential Public Service,” 2012, 19, https://www.stopcorporateabuse.org/sites/default/files/resources/public-water-works.pdf; George Potanovic, “Take Back Our Water: How Trump’s Appetite for Privatization Threatens Your Drinking Water,” Salon, January 23, 2017, http://www.salon.com/2017/01/23/take-back-our-water-how-trumps-appetite-for-privatization-threatens-your-drinking-water_partner/; Food & Water Watch, “Has Water Privatization Gone Too Far in New Jersey?” June, 2010, 6, https://www.inthepublicinterest.org/wp-content/uploads/FWW_PrivatizationInNewJersey.pdf.
 Food & Water Watch, “The State of Public Water in the United States,” 7-8; Lobina, “Troubled Waters,” 32.
 Lobina, “Troubled Waters,” 24-25.
 “Why America’s Schools Have A Money Problem,” NPR, April 18, 2016, http://www.npr.org/2016/04/18/474256366/why-americas-schools-have-a-money-problem; “More Than 40% of Low-Income Schools Don’t Get a Fair Share of State and Local Funds, Department of Education Research Finds,” US Department of Education, November 30, 2011, https://www.ed.gov/news/press-releases/more-40-low-income-schools-dont-get-fair-share-state-and-local-funds-department-; Meredith Broussard, “Why Poor Schools Can’t Win at Standardized Testing,” The Atlantic, July 15, 2014, https://www.theatlantic.com/education/archive/2014/07/why-poor-schools-cant-win-at-standardized-testing/374287/.
 John Merrifield, The School Choice Wars (Lanham, Maryland: Scarecrow Press, 2001), 10; Nathan J. Robinson, “Why Is ‘The Decimation of Public Schools’ A Bad Thing?” Current Affairs, November 30, 2016, https://www.currentaffairs.org/2016/11/why-is-the-decimation-of-public-schools-a-bad-thing.
 Merrifield, The School Choice Wars, 10.
 Robinson, “Why Is The Decimation.”
 Benjamin Herold, “Northeast Schools: ‘Bursting at the Seams,’” The Notebook, June 10, 2011, http://legacy.thenotebook.org/blog/113794/northeast-schools-bursting-seams; Rose Arce, “Does Class Size Matter?” CNN School of Thought, December 6, 2011, http://schoolsofthought.blogs.cnn.com/2011/12/06/does-class-size-matter/.
 Scott McNealy, “Our Public Education System ‘is Failing,’” CNBC, August 9, 2016, http://www.cnbc.com/2016/08/09/our-public-education-system-is-failing-scott-mcnealy-commentary.html.
 Adam B. Schaeffer, “No, Virginia, There is No Such Thing as School Choice,” Cato Institute, October 29, 2006, https://www.cato.org/publications/commentary/no-virginia-there-is-no-such-thing-school-choice.
 The Friedman Foundation for Educational Choice, “How Does School Choice Affect Public Schools?” undated, 1, http://www.schoolchoicewi.org/files/7114/2064/5055/How-does-school-choice-affect-public-schools.pdf.
 Schaeffer, “No, Virginia.”
 Milton Friedman, “Why America Needs School Vouchers,” Wall Street Journal, September 28, 2000, https://www.edchoice.org/who-we-are/our-founders/the-friedmans-on-school-choice/article/why-america-needs-school-vouchers/.
 Martin Carnoy, “School Vouchers are Not a Proven Strategy for Improving Student Achievement,” Report by the Economic Policy Institute, February 28, 2017, 3-7, http://www.epi.org/files/pdf/121635.pdf; Jonathan N. Mills, Anna J. Egalite, and Patrick J. Wolf, “How Has The Louisiana Scholarship Program Affected Students? A Comprehensive Summary of Effects after Two Years,” Education Research Alliance, February 22, 2016, 2-7, http://educationresearchalliancenola.org/files/publications/ERA-Policy-Brief-Public-Private-School-Choice-160218.pdf; Atila Abdulkadiroglu, Parag Pathak, and Christopher Walters, “School Vouchers and Student Achievement: First-Year Evidence from the Louisiana Scholarship Program,” School Effectiveness & Inequality Initiative Discussion Paper #2015.06, December, 2015, http://seii.mit.edu/wp-content/uploads/2016/01/SEII-Discussion-Paper-2015.06-Abdulkadiro%C4%9Flu-Pathak-Walters.pdf; David Figlio and Krzysztof Karbownik, “Evaluation of Ohio’s EdChoice Scholarship Program: Selection, Competition, and Performance Effects,” Thomas B. Fordham Institute, July, 2016, 2, 32-38, https://edex.s3-us-west-2.amazonaws.com/publication/pdfs/FORDHAM%20Ed%20Choice%20Evaluation%20Report_online%20edition.pdf.
 Abdulkadiroglu, Pathak, and Walters, “School Vouchers and Student Achievement,” 3.
 Carnoy, “School Vouchers are Not a Proven Strategy,” 6; Figlio and Karbownik, “Evaluation of Ohio’s EdChoice,” 16.
 Abdulkadiroglu, Pathak, and Walters, “School Vouchers and Student Achievement,” 3; Carnoy, “School Vouchers are Not a Proven Strategy,” 3; Stephanie Mencimer, “Mike Pence’s Voucher Program in Indiana Was a Windfall for Religious Schools,” Mother Jones, December 2, 2016, http://www.motherjones.com/politics/2016/11/mike-pence-voucher-program-religious-schools; Ann Doss Helms, “Praying for Options: Religious Schools Dominate NC Voucher Program,” The Charlotte Observer, April 8, 2016, http://www.charlotteobserver.com/news/local/education/article70759617.html.
 Mark Weber, “School Vouchers Are Not a Cure for Segregation,” Parts I-V, Jersey Jazzman, May, 2016, http://jerseyjazzman.blogspot.fr/2016/05/school-vouchers-are-not-cure-for.html.
 Kevin Carey, “DeVos and Tax Credit Vouchers: Arizona Shows What Can Go Wrong,” New York Times, March 2, 2017, https://www.nytimes.com/2017/03/02/upshot/arizona-shows-what-can-go-wrong-with-tax-credit-vouchers.html?_r=0; Capitol Broadcasting Company, “Editorial: Embezzlement Charge At Fayetteville Private School Exposes Risks of Voucher Abuse,” WRAL, February 21, 2017, http://www.wral.com/editorial-embezzlement-charge-at-fayetteville-private-school-exposes-risks-of-voucher-abuse/16541678/; Gus Garcia-Roberts, “McKay Scholarship Program Sparks a Cottage Industry of Fraud and Chaos,” Miami New Times, June 23, 2011, http://www.miaminewtimes.com/news/mckay-scholarship-program-sparks-a-cottage-industry-of-fraud-and-chaos-6381391.
 See, for example, Lindsay Wagner, “Tiny Private School Puts Spotlight on Voucher System’s Flaws,” NC Policy Watch, March 1, 2017, http://www.ncpolicywatch.com/2016/03/01/tiny-private-school-puts-spotlight-on-voucher-systems-flaws/; see also Lyndsey Layton, “D.C. School Voucher Program Lacks Oversight, GAO Says,” Washington Post, November 15, 2013, https://www.washingtonpost.com/local/education/dc-school-voucher-program-lacks-oversight-gao-says/2013/11/15/9bb8c35e-4e3d-11e3-be6b-d3d28122e6d4_story.html?utm_term=.1f6d412969d2.
 Association of Christian Schools International, “Frequently Asked Questions about School Choice,” accessed March 21, 2017, https://www.acsi.org/legal-legislative-pages/school-choice-pages/frequently-asked-questions-about-school-choice.
 Hadfield, Rules for a Flat World, 5.
 Ibid., 249-264.
 Ibid., 3.
 Indeed, in his seminal 1974 article, Marc Galanter demonstrated that when courts charge fees in order allow access and especially if those fees are combined with the need for other resources, such as the funds to hire a lawyer, access to those courts, and thus access to justice, is considerably diminished for those who do not have the required resources. Expanding on Galanter, Hannah Simpson’s preliminary work demonstrates that in wealthy countries such as the United States, when the state (that is, the government) seeks to use its “property rights institutions” to generate income used for other functions of the state, the result is enhanced access to justice for wealthy persons who are able to pay the required fees, and diminished access to justice for those who are not. Marc Galanter, “Why the “Haves” Come Out Ahead: Speculations on the Limits of Legal Change,” Law & Society Review 9 (1974): 95-160, http://jan.ucc.nau.edu/~phelps/Galanter%201974.pdf; Hannah Simpson, “Access to Justice in Revenue-Seeking Legal Institutions,” Working Paper, June 14, 2017, https://static1.squarespace.com/static/5668949cdc5cb47474730d69/t/59417e47f5e231163ce27bbc/1497464393084/Access+to+Justice+Manuscript_Simpson.pdf.
 Hadfield, Rules for a Flat World, 246-248.
 George Monbiot, “No Country with a McDonald’s Can Remain a Democracy,” The Guardian, December 6, 2016, https://www.theguardian.com/commentisfree/2016/dec/06/mcdonalds-democracy-corporate-globalisation-trump-le-pen-farage; Joel S. Hirschhorn, “America, Welcome to Your Delusional Democracy,” Wake Up World, September 16, 2016, https://wakeup-world.com/2016/09/16/welcome-to-your-delusional-democracy/.
 Martin Gilens and Benjamin I. Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” Perspectives on Politics, September, 2014, 565, 575-577, https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf; see also Martin Gilens and Benjamin I. Page, “Critics Argued With Our Analysis of U.S. Political Inequality. Here Are 5 Ways They’re Wrong,” Washington Post, May 23, 2016, https://www.washingtonpost.com/news/monkey-cage/wp/2016/05/23/critics-challenge-our-portrait-of-americas-political-inequality-heres-5-ways-they-are-wrong/?utm_term=.cf83dde48245.
 Hadfield, Rules for a Flat World, 208, 210-212, 248.
 Barbara Bardes, Mack Shelley, and Steffen Schmidt, American Government and Politics Today: The Essentials 2009 – 2010 Edition (Boston: Wadsworth Cengage Learning, 2010), 10.
 Hadfield, Rules for a Flat World, 271, 253.
 Ibid., 252, 254, 262, 265, 273-275.
 Ibid., 252.
 Ibid., 248, 265, 266-268, 276-277.
 Ibid., 272, 276.
 Ibid., 273.
 Ibid., 271, 277.
 Ibid., 251, 275-276.
 “Agenda for Sustainable Development,” 25-26.
 Hadfield, Rules for a Flat World, 91-100.
 Ibid., 94.
 Ibid., 256.
 In the Public Interest, “How Privatization Increases Inequality,” 48.
 Colin Crouch, The Strange Non-Death of Neoliberalism (Cambridge, England: Polity Press, 2011), 180.