NAIROBI: Rethinking Privatization: The Case of Urban Transportation in Nairobi, Kenya

The implicit notion that the private sector is the major or exclusive creator of economic value is wrong. Government, through both its provision of service and its role in regulating and mediating social conflict and providing mechanisms for collective decision making, adds at least as much value to the economy as does the private sector. Therefore as we move into the 21st century it is critical that we understand how the value chain of public production works, what regulatory mechanisms are needed to make it work, the conditions under which it makes more sense to partner with outsiders, and when it is simply better to directly provide services. To understand how we might reframe the privatization debate in terms of both the legitimating and service functions of government, we will consider the challenge of creating a viable public transport system in Nairobi, Kenya.