In the years since the end of World War II, spending at all levels of government has risen faster than the rates of inflation and population growth combined. Part of the explanation for this dramatic increase in public sector outlays is that government is attempting to do more than ever before. Whether government should be attempting so much is an important issue, but one beyond the scope of this paper.
Coping with the financial stress of trying to do more can be difficult. In Arizona, forecasts for the state budget project deficits of $70 to $140 million for fiscal 1989. Governments at all levels in the state have accumulated debts in excess of $11 billion. The need to deal with these financial issues has encouraged many people to consider the option of privatization.