Privatization has been used to address the limited capacity of government to achieve positive results in child welfare systems. Privatized systems have not realized better outcomes than their public counterparts, however, and many states continue to struggle with implementation. In order to demonstrate that privatization is in fact an investment on the part of the state, rather than a solution to limited public resources, this article explores the relationship between state capacity and privatization and makes recommendations for more effective partnerships between the public and private sectors. (Contains 5 footnotes.)