This paper addresses the importance of a high quality preschool education for children living in poverty, the long-term effects of such an educational experience, the long-term economic benefits to the children enrolled and their families, and the potential impact of privatization on preschool services. The cost-effectiveness and cost-benefits of early childhood education discussed are based on the 27 years of longitudinal data of the Perry Preschool Project (PPP). Research on the PPP has concluded that each dollar invested in high quality preschool education saved the public $7.61 of special services later. The paper also discusses the impact of political change in the United States and Eastern Europe on decentralization and privatization of educational services, including Head Start in the United States. It recommends that the U.S. government should: (1) provide economic and political incentives for the voluntary nonprofit sector to fill the void left when governments no longer provide needed services for children; (2) implement appropriate regulations and guidelines to protect children served by voluntary nonprofit agencies; and (3) fund adequately preschool services for children who are economically at-risk. (Contains 27 references.) (MDM)