The Pioneer Institute: Privatizing the Common Wealth

A report from Political Research Associates

Executive Summary

The Pioneer Institute was founded in 1988 to change the direction of public policy in Massachusetts by influencing opinion-shapers, policy-makers, and the public. Modeled on the conservative Manhattan Institute and Britain’s Institute of Economic Affairs, Pioneer has played a significant role in influencing policy-making over three successive Republican Administrations in Massachusetts, since the election of William Weld as governor in 1990. Its primary focus has been the wide-ranging privatization of government services.

The door to political influence was opened for Pioneer by the Administrations of three consecutive libertarian or moderate Republican governors in Massachusetts (a traditionally Democratic state). Pioneer staff or board members were appointed to crucial positions in the Administrations of William Weld, Paul Cellucci, and Jane Swift, enabling them to implement the ideas they and Pioneer associates had incubated over the years. In addition to political support, Pioneer’s ideas have also received substantial financial backing, as reflected in its budget of approximately $2 million for 2001. This support has been vitally important in helping Pioneer create a hospitable climate within which its ideas can not only be conceived but also received. Pioneer has also benefited from media coverage that overwhelmingly has been either favorable or uncritical. It has also achieved acceptance through its Better Government Competition held annually. The 11 year-old competition, sponsored by Pioneer’s Center for Restructuring Government, invites the public to participate in the policy process by submitting policy proposals.

The Pioneer Institute: Privatizing the Common Wealth provides a critical analysis of Pioneer’s policy prescriptions, as well as an explanation of its success. It is the result of a three-year investigation of Pioneer’s efforts, particularly examining the issues of mental health care and public education. Pioneer has had enormous influence over these issues since its founding in 1988. The report details the extent of Pioneer’s influence:

• While Pioneer has promoted programs that involve fee-for-service arrangements (only users pay for services received), it has generally backed deregulation and the government financing of private provision of services. “Helping Government Do Less with Less” is the underlying rationale of Pioneer’s push for privatization. Most of the winning proposals in its Better Government Competition have proposed relaxed government regulations or encouraged “partnerships” with the private sector. Pioneer’s efforts to redefine the state’s role in the provision of mental health care and public education were driven by this emphasis on loosening regulations and boosting the private sector.



• In 1991, following Pioneer’s critique of the state’s programs for the mentally ill, Governor Weld appointed a commission to devise a plan for the “consolidation and closure” of state institutions serving the mentally ill and mentally retarded. The commission’s report essentially mirrored Pioneer’s. Former Pioneer executive director Charles Baker, Weld’s under-secretary for health and human services at the time, then led the implementation of the commission’s recommendations to shut down a number of hospitals, shifting patients to private facilities.



• The Massachusetts Legislature’s Sub-committee on Privatization reported in a study that, as a result of the Administration’s “rush to close state facilities,” patients were “becoming homeless, incarcerated, or shifted to inappropriate settings.” Moreover, the House Post and Audit Oversight Bureau found that the Weld Administration’s claims of having saved more than $273 million over 3 years were “unsupported and unjustifiable.” And the labor union AFSCME found that between 2,000-3,000 union jobs were eliminated as a result of the closures.



• Pioneer is one of the principal advocates of school vouchers, charter schools, and standardized testing. In 1991, it published a report by Abigail Thernstrom of the Manhattan Institute, titled School Choice in Massachusetts that proposed a pilot voucher program in one of the state’s urban systems. Later in the 1990s, William Edgerly (a Pioneer board member) and Steven Wilson (former Pioneer codirector) were instrumental in the creation of CEO’s for Fundamental Change in Education, a high-powered lobbying group that has worked to influence policy makers on starting and increasing the number of charter schools in the state. Edgerly and Wilson also founded Advantage Schools, one of the few for-profit education management companies that run many of the charter schools in Massachusetts.



• The Auditor of the Commonwealth of Massachusetts found that as more charter schools opened, the costs to taxpayers actually increased 10 fold, representing one of the fastest growing expenses for the state. While public schools are supported by a combination of state and local funding, private charter schools in Massachusetts are funded through money deducted from a public school district’s state education aid. This formula was created by Steven Wilson and approved by Charles Baker, who by that time was William Weld’s secretary of administration and finance. However, unlike public schools, charter schools are exempt from serving severely disabled children, and they often do not offer more expensive bilingual and vocational programs. The average cost per student under Wilson’s formula often exceeds what public schools spend on their regular students.

The Pioneer Institute is an example of a growing number of rightist think tanks and policy institutes across the United States that exert influence on policy making at the state and local levels. The political and financial support they receive is key to their success. At the Pioneer Institute, that support has come from successive Republican Administrations and the financial backing of a number of conservative foundations, individuals, and corporations.

An examination of the policies advocated by the Pioneer Institute, and often implemented by those associated with Pioneer, illustrates that those most harmed by privatization schemes are those who are economically and socially disadvantaged. Under privatization programs, the private sector is not obligated to serve all sections of society, further aggravating the growing gap in services between the rich and the poor.

Despite Pioneer’s promotion of privatization schemes, viable and successful privatization initiatives in Massachusetts have been rare. This should alert us that the rhetoric of private sector efficiency is very often merely that. What savings have been achieved by the state have largely been the result of undercutting union wages, transferring costs onto other payers, and reducing service provision. Sound legislation results from cooperation among the community, labor, and the government, not from irresponsible privatization schemes. The establishment of progressive policy institutes and think tanks in Massachusetts and in other states is critically important to provide a practical and ethical counterweight to rightist organizations such as the Pioneer Institute.