embroiled in the war in Vietnam, to 1.4 million in 1998.) The rising costs of taxes to pay for expanded government services, as well as the general American distaste for "big government" and increasingly powerful public employee unions, led many policy-makers in the 1970s, 1980s, and 1990s to question whether government is the most efficient provider of needed services.

A new word -- "privatization" -- was coined and quickly gained acceptance worldwide to describe the practice of turning certain government functions over to the private sector. In the United States, privatization has occurred primarily at the municipal and regional levels. Major U.S. cities such as New York, Los Angeles, Philadelphia, Dallas, and Phoenix began to employ private companies or nonprofit organizations to perform a wide variety of activities previously performed by the municipalities themselves, ranging from streetlight repair to solid-waste disposal and from data processing to management of prisons. Some federal agencies, meanwhile, sought to operate more like private enterprises; the United States Postal Service, for instance, largely supports itself from its own revenues rather than relying on general tax dollars. Privatization of public services remains controversial, however. While advocates insist that it reduces costs and increases productivity, others argue the opposite, noting that private contractors need to make a profit and asserting that they are not necessarily being more productive. Public sector unions, not surprisingly, adamantly oppose most privatization proposals. They contend that private contractors in some cases have submitted very low bids in order to win contracts, but later raised prices substantially. Advocates counter that privatization can be effective if it introduces competition. Sometimes the spur of threatened privatization may even encourage local government workers to become more efficient. As debates over regulation, government spending, and welfare reform all demonstrate, the proper role of government in the nation's economy remains a 18