Aviation Security After September 11th: Public or Private?
Was the public or the private sector best positioned to provide security and baggage screening services? The suicide attacks on the World Trade Center and the Pentagon, and the plane crash outside Pittsburgh, marked September 11, 2001, as the date of the most severe terrorist attack and the most dreadful aviation incident in U.S. history, and initiated a search for steps to prevent such a calamity in the future. The U.S. House and the U.S. Senate passed two competing bills to address aviation security. The principal difference between the bills was whether the screening function could continue to be provided by the private sector or would be federalized--in effect, a reverse privatization of the service. Members of Congress had to consider questions of links between ownership, cost, and quality, and, most importantly, support one of the two bills. Can be used to introduce issues of market and government failure and to develop a contracting framework where key issues are the availability of information, the ability to provide incentives, the importance of incentives and innovation, and the importance of attributes that can't be contracted (such as some dimensions of product quality).