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Encyclopedia > Privatization
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Privatization is the incidence or process of transferring ownership of business from the public sector (government) to the private sector (business). In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement. [1] Image File history File links Question_book-3. ... < [[[[math>Insert formula here</math>The public sector is that part of economic and administrative life that deals with the delivery of goods and services by and for the [[government </math></math></math></math> Direct administration funded through taxation; the delivering organisation generally has no specific requirement to meet commercial... The private sector of a nations economy consists of all that is outside the state. ...


The term "Privatization" also has been used to describe an unrelated, nongovernmental interaction involving the buyout, by the majority owner, of all shares of a public corporation or holding company's stock, privatizing a publicly traded stock. It has been claimed that the term was first used in 1930s by The Economist in covering German economic policy.[2][3] Literally a public company is a company owned by the public. ... For the band, see Big Brother and the Holding Company. ... The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd and edited in London. ...

Contents

Types of privatization

There are three main methods of privatization:

  • Share issue privatization (SIP) - selling shares on the stock market
  • Asset sale privatization - selling the entire firms or part of it to a strategic investor, usually by auction or using Treuhand model
  • Voucher privatization - shares of ownership are distributed to all citizens, usually for free or at a very low price.

Share issue privatization is the most common type of privatization. A stock market or (equity market) is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; both of these are securities listed on a stock exchange as well as those only traded privately. ... An auctioneer and her assistants scan the crowd for bidders An auction is a process of buying and selling goods by offering them up for bid, taking bids, and then selling the item to the winning bidder. ... The voucher privatization is a privatization method where the citizens get or can inexpensively buy a book of vouchers that represent potential shares in any state-owned company. ...


Share issue can broaden and deepen domestic capital markets, boosting liquidity and potentially economic growth, but if the capital markets are insufficiently developed it may be difficult to find enough buyers, and transaction costs (e.g. underpricing required) may be higher. For this reason, many governments elect for listings in the more developed and liquid markets. Euronext, and the London, New York and Hong Kong Stock Exchanges are popular because they are highly developed and sophisticated. Market liquidity is a business or economics term that refers to the ability to quickly buy or sell a particular item without causing a significant movement in the price. ... World GDP/capita changed very little for most of human history before the industrial revolution. ... Euronext N.V. is a pan-European stock exchange based in Paris[1] and with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom. ... The Source by Greyworld, in the new LSE building Paternoster Square. ... The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange. ... The Hong Kong Stock Exchange (traditional Chinese: , also 港交所; abbreviated as HKEX; SEHK: 0388) is the stock exchange of Hong Kong. ...


As a result of higher political and currency risk deterring foreign investors, asset sales are more common in developing countries. A developing country is a country with low average income compared to the world average. ...


Voucher privatization has mainly been used in the transition economies of Central and Eastern Europe, such as Russia, Poland, the Czech Republic, and Slovakia. A transition economy is an economy which is changing from a planned economy to a free market. ...


A very substantial benefit to share or asset sale privatizations is that bidders compete to offer the state the highest price, creating revenues for the state to redistribute in addition to new tax revenue. Voucher privatizations, on the other hand, would be a genuine return of the assets into the hands of the general population, and create a real sense of participation and inclusion. Vouchers, like all other private property, could then be sold on if preferred by what companies are offering.


Arguments for and against privatization

Pro-privatization

Proponents of privatization believe that private market actors can more efficiently deliver many goods or service than government due to free market competition. In general, it is argued that over time this will lead to lower prices, improved quality, more choices, less corruption, less red tape, and quicker delivery. Many proponents do not argue that everything should be privatized; the existence of problems such as market failures and natural monopolies may limit this. However, a small minority thinks that everything can be privatized, including the state itself. A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy... For other uses, see Competition (disambiguation). ... Market failure is a term used by economists to describe the condition where the allocation of goods and services by a market is not efficient. ... In economics, a natural monopoly is a persistent situation where a single company is the only supplier of a particular kind of product or service due to the fundamental cost structure of the industry. ...


The basic economic argument given for privatization is that governments have few incentives to ensure that the enterprises they own are well run. One problem is the lack of comparison in state monopolies. It is difficult to know if an enterprise is efficient or not without competitors to compare against. Another is that the central government administration, and the voters who elect them, have difficulty evaluating the efficiency of numerous and very different enterprises. A private owner, often specializing and gaining great knowledge about a certain industrial sector, can evaluate and then reward or punish the management in much fewer enterprises much more efficiently. Also, governments can raise money by taxation or simply printing money should revenues be insufficient, unlike a private owner. In economics, an incentive in anything that provides a motive for a particular course of action — that counts as a reason for preferring one choice to the alternatives. ...


If there are both private and state owned enterprises competing against each other, then the state owned may borrow money more cheaply from the debt markets than private enterprises, since the state owned enterprises are ultimately backed by the taxation and printing press power of the state, gaining an unfair advantage.


Privatizing a non-profitable company which was state-owned may force the company to raise prices in order to become profitable. However, this would remove the need for the state to provide tax money in order to cover the losses.

  • Performance. State-run industries tend to be bureaucratic. A political government may only be motivated to improve a function when its poor performance becomes politically sensitive, and such an improvement can be reversed easily by another regime.
  • Improvements. Conversely, the government may put off improvements due to political sensitivity and special interests — even in cases of companies that are run well and better serve their customers' needs.
  • Corruption. A monopolized function is prone to corruption; decisions are made primarily for political reasons, personal gain of the decision-maker (i.e. "graft"), rather than economic ones. Corruption (or principal-agent issues) during the privatization process - however - can result in significant underpricing of the asset. This allows for more immediate and efficient corrupt transfer of value - not just from ongoing cash flow, but from the entire lifetime of the asset stream. Often such transfers are difficult to reverse.
  • Accountability. Managers of privately owned companies are accountable to their owners/shareholders and to the consumer, and can only exist and thrive where needs are met. Managers of publicly owned companies are required to be more accountable to the broader community and to political "stakeholders". This can reduce their ability to directly and specifically serve the needs of their customers, and can bias investment decisions away from otherwise profitable areas.
  • Civil-liberty concerns. A company controlled by the state may have access to information or assets which may be used against dissidents or any individuals who disagree with their policies.
  • Goals. A political government tends to run an industry or company for political goals rather than economic ones.
  • Capital. Privately held companies can sometimes more easily raise investment capital in the financial markets when such local markets exist and are suitably liquid. While interest rates for private companies are often higher than for government debt, this can serve as a useful constraint to promote efficient investments by private companies, instead of cross-subsidizing them with the overall credit-risk of the country. Investment decisions are then governed by market interest rates. State-owned industries have to compete with demands from other government departments and special interests. In either case, for smaller markets, political risk may add substantially to the cost of capital.
  • Security. Governments have had the tendency to "bail out" poorly run businesses, often due to the sensitivity of job losses, when economically, it may be better to let the business fold.
  • Lack of market discipline. Poorly managed state companies are insulated from the same discipline as private companies, which could go bankrupt, have their management removed, or be taken over by competitors. Private companies are also able to take greater risks and then seek bankruptcy protection against creditors if those risks turn sour.
  • Natural monopolies. The existence of natural monopolies does not mean that these sectors must be state owned. Governments can enact or are armed with anti-trust legislation and bodies to deal with anti-competitive behavior of all companies public or private.
  • Concentration of wealth. Ownership of and profits from successful enterprises tend to be dispersed and diversified -particularly in voucher privatization. The availability of more investment vehicles stimulates capital markets and promotes liquidity and job creation.
  • Political influence. Nationalized industries are prone to interference from politicians for political or populist reasons. Examples include making an industry buy supplies from local producers (when that may be more expensive than buying from abroad), forcing an industry to freeze its prices/fares to satisfy the electorate or control inflation, increasing its staffing to reduce unemployment, or moving its operations to marginal constituencies.
  • Profits. Corporations exist to generate profits for their shareholders. Private companies make a profit by enticing consumers to buy their products in preference to their competitors' (or by increasing primary demand for their products, or by reducing costs). Private corporations typically profit more if they serve the needs of their clients well. Corporations of different sizes may target different market niches in order to focus on marginal groups and satisfy their demand. A company with good corporate governance will therefore be incentivized to meet the needs of its customers efficiently.

In sociological theories, bureaucracy is an organizational structure characterized by regularized procedure, division of responsibility, hierarchy, and impersonal relationships. ... The principal-agent problem in economics refers to the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent. ... Politics is the process by which decisions are made within groups. ... Economics (deriving from the Greek words οίκω [okos], house, and νέμω [nemo], rules hence household management) is the social science that studies the allocation of scarce resources to satisfy unlimited wants. ... Political risk is a broad term to collectively describe the risks companies and investors face due to the exercise of political power. ... In economics, a natural monopoly is a persistent situation where a single company is the only supplier of a particular kind of product or service due to the fundamental cost structure of the industry. ... Antitrust or competition laws are laws which prohibit anti-competitive behavior and unfair business practices. ... A politician is an individual involved in politics, sometimes this may include political scientists. ... Politics is the process by which decisions are made within groups. ... Populism is a political ideology or rhetorical style that holds that the common person is oppressed by the elite in society, which exists only to serve its own interests, and therefore, the instruments of the State need to be grasped from this self-serving elite and instead used for the... CIA figures for world unemployment rates, 2006 Unemployment is the state in which a person is without work, available to work, and is currently seeking work. ... A constituency is any cohesive corporate unit or body bound by shared structures, goals or loyalty. ... Consumers refers to individuals or households that use goods and services generated within the economy. ... Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered or controlled. ...

Anti-privatization

Opponents of privatization dispute the claims concerning the alleged lack of incentive for governments to ensure that the enterprises they own are well run, on the basis of the idea that governments are proxy owners answerable to the people. It is argued that a government which runs nationalized enterprises poorly will lose public support and votes, while a government which runs those enterprises well will gain public support and votes. Thus, democratic governments do have an incentive to maximize efficiency in nationalized companies, due to the pressure of future elections.


Opponents of certain privatizations believe certain parts of the social terrain should remain closed to market forces in order to protect them from the unpredictability and ruthlessness of the market (such as private prisons, basic health care, and basic education). Another view is that some of the utilities which government provides benefit society at large and are indirect and difficult to measure or unable to produce a profit, such as defense. Still another is that natural monopolies are by definition not subject to competition and better administrated by the state. Most prisons are operated by government agencies. ... A physician visiting the sick in a hospital. ... Security measures taken to protect the Houses of Parliament in London, England. ... In economics, a natural monopoly is a persistent situation where a single company is the only supplier of a particular kind of product or service due to the fundamental cost structure of the industry. ...


The controlling ethical issue in the anti-privatization perspective is the need for responsible stewardship of social support missions. Market interactions are all guided by self-interest, and successful actors in a healthy market must be committed to charging the maximum price that the market will bear. Privatization opponents believe that this model is not compatible with government missions for social support, whose primary aim is delivering affordability and quality of service to society.


Many privatization opponents also warn against the practice's inherent tendency toward corruption. As many areas which the government could provide are essentially profitless, the only way private companies could, to any degree, operate them would be through contracts or block payments. In these cases, the private firm's performance in a particular project would be removed from their performance, and embezzlement and dangerous cost cutting measures might be taken to maximize profits.


Some would also point out that privatizing certain functions of government might hamper coordination, and charge firms with specialized and limited capabilities to perform functions which they are not suited for. In rebuilding a war torn nation's infrastructure, for example, a private firm would, in order to provide security, either have to hire security, which would be both necessarily limited and complicate their functions, or coordinate with government, which, due to a lack of command structure shared between firm and government, might be difficult. A government agency, on the other hand, would have the entire military of a nation to draw upon for security, whose chain of command is clearly defined. Opponents would say that this is a false assertion: numerous books refer to poor organization between government departments (for example the Hurricane Katrina incident).


Furthermore, opponents of privatization argue that it is undesirable to transfer state-owned assets into private hands for the following reasons:

  • Performance. A democratically elected government is accountable to the people through a legislature, Congress or Parliament, and is motivated to safeguarding the assets of the nation. The profit motive may be subordinated to social objectives.
  • Improvements. the government is motivated to performance improvements as well run businesses contribute to the State's revenues.
  • Corruption. Government ministers and civil servants are bound to uphold the highest ethical standards, and standards of probity are guaranteed through codes of conduct and declarations of interest. However, the selling process could lack transparency, allowing the purchaser and civil servants controlling the sale to gain personally.
  • Accountability. The public does not have any control or oversight of private companies.
  • Civil-liberty concerns. A democratically elected government is accountable to the people through a parliament, and can intervene when civil liberties are threatened.
  • Goals. The government may seek to use state companies as instruments to further social goals for the benefit of the nation as a whole.
  • Capital. Governments can raise money in the financial markets most cheaply to re-lend to state-owned enterprises.
  • Lack of market discipline. Governments have chosen to keep certain companies/industries under public ownership because of their strategic importance or sensitive nature.
  • Cuts in essential services. If a government-owned company providing an essential service (such as the water supply) to all citizens is privatized, its new owner(s) could lead to the abandoning of the social obligation to those who are less able to pay, or to regions where this service is unprofitable.
  • Natural monopolies. Privatization will not result in true competition if a natural monopoly exists.
  • Concentration of wealth. Profits from successful enterprises end up in private, often foreign, hands instead of being available for the common good.
  • Political influence. Governments may more easily exert pressure on state-owned firms to help implementing government policy.
  • Downsizing. Private companies often face a conflict between profitability and service levels, and could over-react to short-term events. A state-owned company might have a longer-term view, and thus be less likely to cut back on maintenance or staff costs, training etc, to stem short term losses. Many private companies have downsized while making record profits.
  • Profit. Private companies do not have any goal other than to maximize profits. A private company will serve the needs of those who are most willing (and able) to pay, as opposed to the needs of the majority, and are thus anti-democratic.

The House of Representatives Chamber of the Parliament of Australia in Canberra. ... The House of Representatives Chamber of the Parliament of Australia in Canberra. ... In economics, the term natural monopoly is used to refer to two different things. ...

Outcomes

Literature reviews [4][5] find that in competitive industries with well-informed consumers, privatization consistently improves efficiency. Such efficiency gains mean a one-off increase in GDP, but through improved incentives to innovate and reduce costs also tend to raise the rate of economic growth. The type of industries to which this generally applies include manufacturing and retailing. Although typically there are social costs associated with these efficiency gains[6], many economists argue that these can be dealt with by appropriate government support through redistribution and perhaps retraining. World GDP/capita changed very little for most of human history before the industrial revolution. ... Manufacturing (from Latin manu factura, making by hand) is the use of tools and labor to make things for use or sale. ... Retail redirects here. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Retraining is the process of learning a new skill or trade, often in response to a change in the economic environment. ...


In sectors that are natural monopolies or public services, the results of privatization are much more mixed, as a private monopoly behaves much the same as a public one in liberal economic theory. In general, if the performance of an existing public sector operation is sufficiently bad, privatization (or threat thereof) has been known to improve matters. Changes may include, inter alia, the imposition of related reforms such as greater transparency and accountability of management, improved internal controls, regulatory systems, and better financing, rather than privatization itself. In economics, the term natural monopoly is used to refer to two different things. ... Public services is a term usually used to mean services provided by government to its citizens, either directly (through the public sector) or by financing private provision of services. ... This article is about the economic term. ... Look up liberal on Wiktionary, the free dictionary Liberal may refer to: Politics: Liberalism American liberalism, a political trend in the USA Political progressivism, a political ideology that is for change, often associated with liberal movements Liberty, the condition of being free from control or restrictions Liberal Party, members of... This page includes English translations of several Latin phrases and abbreviations such as . ... A regulation is a legal restriction promulgated by government administrative agencies through rulemaking supported by a threat of sanction or a fine. ...


Regarding political corruption, it is a controversial issue whether the size of the public sector per se results in corruption. The Nordic countries have low corruption but large public sectors. However, these countries score high on the Ease of Doing Business Index, due to good and often simple regulations, and for political rights and civil liberties, showing high government accountability and transparency. One should also notice the successful, corruption-free privatizations and restructuring of government enterprises in the Nordic countries. For example, dismantling telecommunications monopolies have resulted in several new players entering the market and intense competition with price and service. World map of the Corruption Perceptions Index by Transparency International, which measures the degree to which corruption is perceived to exist among public officials and politicians. High numbers (green) indicate relatively less corruption, whereas lower numbers (red) indicate relatively more corruption. ... Political map of the Nordic countries and associated territories. ... World map of the Ease of Doing Business Index. ... Map reflecting the findings of Freedom Houses 2007 survey, concerning the state of world freedom in 2006, which is widely used by researchers and correlates highly with other measures of democracy[1]. Some of these estimates are disputed. ... Accountability is a concept in ethics with several meanings. ...


Also regarding corruption, the sales themselves give a large opportunity for grand corruption. Privatizations in Russia and Latin America were accompanied by large-scale corruption during the sale of the state-owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have reported widely the grand corruption that accompanied the sales, studies have argued that in addition to increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption is more prevalent in non-privatized sectors. Furthermore, there is evidence to suggest that extralegal and unofficial activities are more prevalent in countries that privatized less.[7] Ireland ranked 23rd in a recent OECD broadband survey[8] Eircom have offered the Irish Government a stake in its nationwide Copper network infrastructure[9]. Should the state accept it will reverse the privatisation of Ireland's communications network. The Organisation for Economic Co-operation and Development (OECD), (in French: Organisation de coopération et de développement économiques; OCDE) is an international organisation of thirty countries that accept the principles of representative democracy and a free market economy. ...


A controversial privatization was the privatization of British railways. The UK track-owning company Railtrack, in effect a natural monopoly, was effectively repossessed by the British government. Train operation remains in the hands of private operators with franchises awarded by the Department for Transport (except for Merseyrail the franchise of which is awarded by Merseyside Passenger Transport Executive). The privatisation of British Rail was the result of the Railways Act 1993 introduced by John Majors Conservative government. ... For the generic term, see rail tracks. ... Due to historical differences the railway network of the United Kingdom is split into two independent systems: one on the island of Great Britain and one in Northern Ireland, which is closely linked to the railway system of the Republic of Ireland. ... In the United Kingdom, the Department for Transport is the government department responsible for the transport network. ... Merseyrail is the name given to the electric commuter train network centred on Liverpool. ... The Merseyside Passenger Transport Executive (MPTE, or Merseytravel, as it is branded) is the Passenger Transport Executive responsible for the coordination of public transport in the metropolitan county of Merseyside, England. ...


There are various precedents in history which some would claim as examples in which improper privatization, or the failure of government to conduct certain functions, caused various complications.

  1. In the reconstruction of Iraq, the government decided to contract out many different reconstruction functions to private firms. Shortly thereafter, those firms have been accused of cutting corners and being generally ineffective in reconstructing the country. Halliburton, in particular, was accused of, among other things, skimping on the cost of providing meals to soldiers. Various other complaints include the lagging reconstruction of water and electricity utilities, and providing defective equipment to soldiers.
  2. Many, such as Dick Polman of The Philadelphia Inquirer, noted that prior to Hurricane Katrina, the government had "privatized many of FEMA's basic functions". The uncoordinated action between private emergency relief agencies, as well as the military (which would often turn back relief trucks) resulting in the poor response to the storm that many would claim was a result of this privatization.

With reference to privatization of the process of revenue collection in Bangladesh, privatization has been termed as a fatal remedy. As the revenue department became extremely corrupt, the government of Bangladesh privatized part of collection of customs duties, its major source of revenue, by way of engaging Pre-shipment Inspection agencies for physical examination of the cargo and for determining the assessable value. The policy partly privatized in the Customs department but the in effect, it backfired. The PSI agencies proved to be more corrupt and more venal than the Customs officials. [10]. For other uses, see Haliburton. ... The Philadelphia Inquirer is one of a two Knight Ridder newspaper duopoly daily for the Philadelphia area. ... This article is about the Atlantic hurricane of 2005. ... New FEMA seal The Federal Emergency Management Agency or FEMA is an agency of the United States government dedicated to swift response in the event of disasters, both natural and man-made. ...


Negative responses to privatization

Privatization proposals in key public service sectors such as water and electricity are in many cases strongly opposed by opposition political parties and civil society groups. Usually campaigns involve demonstrations and political means; sometimes they may become violent (e.g. Cochabamba Riots of 2000 in Bolivia; Arequipa, Peru, June 2002). Opposition is often strongly supported by trade unions. Opposition is usually strongest to water privatization - as well as Cochabamba (2000), recent examples include Ghana and Uruguay (2004). In the latter case a civil-society-initiated referendum banning water privatization was passed in October 2004. Public services is a term usually used to mean services provided by government to its citizens, either directly (through the public sector) or by financing private provision of services. ... Impact from a water drop causes an upward rebound jet surrounded by circular capillary waves. ... Electricity (from New Latin Ä“lectricus, amberlike) is a general term for a variety of phenomena resulting from the presence and flow of electric charge. ... The Politics series Politics Portal This box:      Civil society is composed of the totality of voluntary civic and social organizations and institutions that form the basis of a functioning society as opposed to the force-backed structures of a state (regardless of that states political system) and commercial institutions. ... The Cochabamba protests of 2000 were a series of protests that took place in Cochabamba, Bolivia, between January and April 2000, because of the privatization of the municipal water supply. ... For the cactus genus, see Oreocereus. ... The Lawrence textile strike (1912), with soldiers surrounding peaceful demonstrators A trade union or labor union is an organization of workers who have banded together to achieve common goals in key areas such as wages, hours, and working conditions, forming a cartel of labour. ... Water privatization is a short-hand for the privatization of water services, although more rarely it refers to privatization of water resources themselves. ... Elections Part of the Politics series Politics Portal This box:      A referendum (plural referendums or referenda), ballot question, or plebiscite (from Latin plebiscita, originally a decree of the Concilium Plebis) is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal. ...


Reverse privatization

A reversion from contracted ownership of an enterprise and/or services to governmental ownership and/or provision is called reverse privatization or nationalization. Such a situation most often occurs when a privatization contractor fails financially and/or the governmental unit has been unable to purchase satisfactory service at prices it regards as less than state-ownership or self-operation of services. Another circumstance may occur when greater control than viable under privatization is determined to be in the governmental unit's best interest. An example would be the nationalization of energy and telecommunications in Venezuela as announced by President Hugo Chávez in January 2007. Compañía Anónima Nacional de Teléfonos de Venezuela (CANTV) is one of the first telephone service enterprises in Venezuela, founded in 1930, when businessman Félix A. Guerrero obtained a concession from the Ministerio de Fomento to build a telephone network primarily in the capital, and of course... Hugo Rafael Chávez Frías (pronounced ) (born July 28, 1954) is the current President of Venezuela. ...


National security concerns may be the source of reverse privatization actions when the most likely providers are non-domestic or international corporations or entities. For example, in 2001, in response to the September 11th attacks, the then-private airport security industry in the United States was nationalized[citation needed] and put under the authority of the Transportation Security Administration. TSA emblem The Transportation Security Administration (TSA) is a U.S. government agency that was created as part of the Aviation and Transportation Security Act passed by the U.S. Congress and signed into law by President George W. Bush on November 19, 2001. ...


When a state-owned enterprise or service has been nationalized or privatized, and then is reverted to state-ownership or service provision, the process of reverse privatization may be called denationalization. Nationalization, also spelled nationalisation, is the act by which a nation takes possession of assets without requiring the owners consent, with or without payment of compensation. ...


See also

Nationalization, also spelled nationalisation, is the act by which a nation takes possession of assets without requiring the owners consent, with or without payment of compensation. ... Co-op redirects here. ... Deregulation is the process by which governments remove, reduce, or simplify restrictions on business and individuals in order to (in theory) encourage the efficient operation of markets. ... Entrance to a guard-gated community (Paradise Village Grand Marina Villas, Nuevo Vallarta, Mexico). ... This article is about state ownership. ... Reprivatization refers to the process of restoring to its former owners properties seized by a government, or to the process of compensating previously uncompensated former owners. ... This article is about securitization in finance. ... There are three main interpretations of the idea of a welfare state: the provision of welfare services by the state. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... This article does not cite any references or sources. ... Urban enterprise zones encourage development in blighted neighborhoods by offering entrepreneurs and investors tax and regulatory relief if they start businesses in the area. ... In October 2004, a conference was held at Middlebury College, entitled The Privatization of National Security. ... Private Sector Development (PSD) is a strategy for promoting economic growth and reducing poverty in developing countries by incorporating private industry and competitive markets into a country’s overall development framework. ... The privatisation of British Rail was the result of the Railways Act 1993 introduced by John Majors Conservative government. ...

References

  1. ^ Chowdhury, F. L. ‘’Corrupt Bureaucracy and Privatization of Tax Enforcement’’, 2006: Pathak Samabesh, Dhaka.
  2. ^ Edwards, Ruth Dudley (1995). The Pursuit of Reason: The Economist 1843-1993. Harvard Business School Press, 946. ISBN 0-87584-608-4. 
  3. ^ Bel, Germà (2006). "Retrospectives: The Coining of “Privatization” and Germany's National Socialist Party". Journal of Economic Perspectives 20 (3): 187-194. doi:10.1257/jep.20.3.187. ISSN 0895-3309. 
  4. ^ "Privatization in Competitive Sectors: The Record to Date, World Bank Policy Research Working Paper No. 2860", John Nellis and Sunita Kikeri, World Bank, June 2002. 
  5. ^ "From State To Market: A Survey Of Empirical Studies On Privatization", William L. Megginson and Jeffry M. Netter, Journal of Economic Literature, June 2001. 
  6. ^ "Winners and Losers: Assessing the Distributional Impact of Privatization, CGD Working Paper No 6", Nancy Birdsall & John Nellis, Center for Global Development, March 9, 2006. 
  7. ^ Privatization in Competitive Sectors: The Record to Date. Sunita Kikeri and John Nellis. World Bank Policy Research Working Paper 2860, June 2002. [1] Privatization and Corruption. David Martimort and Stéphane Straub. [2]</r With recent cost increases in some industries people are beginning to question whether privitisation is good value for money with the cost of certain survices increasing rapidly but the service provided either staying constant or if not decreasing and yet not justifying the cost increase imposed.

    Contents

    Alternatives to total privatization

    Municipalization

    Transferring control of a nationalized business to municipal government is an alternative sometimes proposed to privatization. Ruth Dudley-Edwards is an Irish historian, crime novelist, journalist and broadcaster. ... A digital object identifier (or DOI) is a standard for persistently identifying a piece of intellectual property on a digital network and associating it with related data, the metadata, in a structured extensible way. ... ISSN, or International Standard Serial Number, is the unique eight-digit number applied to a periodical publication including electronic serials. ... Nationalization is the act of taking assets into state ownership. ... A municipality is an administrative entity composed of a clearly defined territory and its population and commonly referring to a city, town, or village, or a small grouping of them. ...

    Outsourcing or Sub-contracting

    It is possible that national services may sub-contract or out-source functions to private enterprises. A notable example of this is in the United Kingdom, where many municipalities have contracted out their garbage collection or administration of parking fines to private companies. In addition, the British government is debating the possibility of involving the private sector more in the workings of the National Health Service, principally by referring patients to private surgeries to ease the load on existing NHS human resources, and covering the cost of this. A municipality or general-purpose district (compare with: special-purpose district) is an administrative local area generally composed of a clearly defined territory and commonly referring to a city, town, or village government. ... NHS redirects here. ...

    Partial ownership

    An enterprise may be privatized, with a number of shares in the company being retained by the state. This is a particularly notable phenomenon in France, where the state often retains a "blocking stake" in private industries. In Germany, the state privatized Deutsche Telekom in small tranches, and still retains about a third of the company. As of 2005, the state of North Rhine-Westphalia is also planning to buy shares in the energy company E.ON in what is claimed to be an attempt to control spiraling costs. DTAG corporate headquarters, Bonn Deutsche Telekom AG (ISIN: DE0005557508, FWB: DTE, NYSE: DT, LSE: DEU, TYO: 9496) (English translation: German Telecom) (abbreviated DTAG) is a telecommunications company headquartered in Bonn, Germany. ... Year 2005 (MMV) was a common year starting on Saturday (link displays full calendar) of the Gregorian calendar. ... Coat of arms Location Time zone CET/CEST (UTC+1/+2) Administration Country NUTS Region DEA Capital Düsseldorf Prime Minister Jürgen Rüttgers (CDU) Governing parties CDU / FDP Votes in Bundesrat 6 (from 69) Basic statistics Area  34,084 km² (13,160 sq mi) Population 18,033,000... E.ON AG (ISIN: DE0007614406, NYSE: EON, LSE: EON) , based in Düsseldorf, Germany, is an energy corporation, one of the 30 members of the DAX stock index of major German companies. ...


    Whilst partial privatization could be an alternative, it is more often a stepping stone to full privatization. It can offer the business a smoother transition period during which it can gradually adjust to market competition. Some state-owned companies are so large that there is the risk of sucking liquidity from the rest of the market, even in the most liquid marketplaces, and thus must be sold off bit by bit. The first tranche of a multi-step privatization would also in the first instance establish a valuation for the enterprise to mitigate complaints of under-pricing.


    In some instances of partial privatization of contracted services, provision of some portion(s) of the state-owned service are provided by private-sector contactors, but the government retains the capacity to self-operate at contract intervals, if it so chooses. An example of partial privatization would be some forms of school bus service contracting, such as arrangements where equipment and other resources purchased with government capital funds and/o those already owned by a governmental entity are used by the contractor for a period of time in providing services, but ownership is retained by the governmental unit. This form of partial privatization eases concerns that once an operation is contracted, the government may be unable to obtain sufficient competitive bids, and be subjected to terms less desirable than the prior operation under state-ownership. Under that scenario, a reverse privatization would be more feasible for the government. (see section below) A school bus contractor is a private company or proprietorship which provides school bus service to a school district or non-public school. ...


    See also Public-private partnership. Public-private partnership (PPP) is a system in which a government service or private business venture is funded and operated through a partnership of government and one or more private sector companies. ...

    Notable privatizations

    See also: List of privatizations

    Privatization programs have been undertaken in many countries across the world, falling into three major groups. The first is privatization programs conducted by transition economies in Central and Eastern Europe after 1989 in the process of instituting a market economy. The second is privatization programs carried out in developing countries under the influence of international financial institutions such as the World Bank and IMF. The third is privatization programs carried out by developed country governments, the most comprehensive probably being those of New Zealand and the United Kingdom in the 1980s and 1990s. List of privatizations is a link list for notable privatizations. ... A transition economy is an economy which is changing from a planned economy to a free market. ... Year 1989 (MCMLXXXIX) was a common year starting on Sunday (link displays 1989 Gregorian calendar). ... A market economy (also called a free market economy or a free enterprise economy) is an economic system in which the production and distribution of goods and services take place through the mechanism of free markets (though completley useless to some dumbasses) guided by a free price system. ... A developing country is a country with low average income compared to the world average. ... The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ...


    Privatization has been partially successful in telecommunications in Europe because genuine competition has arisen: the former state-owned enterprises lost their monopolies due to legislation and technological change, competitors entered the market, and prices for broadband access and telephone calls fell dramatically. However, in the Republic of Ireland the former state owned telecommunications company Telecom Éireann was privatised in an IPO in 1999 under the Fianna Fáil Government. The company was subsequently renamed Eircom. Ireland's former Telecommunications Minister Noel Dempsey has stated that the privatisation was a mistake.<ref>[http://archives.tcm.ie/businesspost/2005/07/10/story6320.asp Dempsey's dilemmas]</li> <li id="cite_note-7">'''[[#cite_ref-7|^]]''' [http://www.oecd.org/document/7/0,2340,en_2649_34223_38446855_1_1_1_1,00.html OECD Broadband Statistics to December 2006]</li> <li id="cite_note-8">'''[[#cite_ref-8|^]]''' [http://www.rte.ie/business/2007/0803/eircom.html Eircom and State in broadband swap?]</li> A state-owned enterprise (SOE) is an enterprise, often a corporation, owned by a government. ... Broadband in telecommunications is a term that refers to a signaling method that includes or handles a relatively wide range of frequencies, which may be divided into channels or frequency bins. ... The corporate logo. ... Wikipedia does not yet have an article with this exact name. ... Fianna Fáil – The Republican Party (Irish: ), commonly referred to as Fianna Fáil (IPA ; traditionally translated by the party into English as Soldiers of Destiny, though the actual meaning is Soldiers [Fianna] of Ireland[1]), is currently the largest political party in Ireland with 55,000 members. ... eircom Group plc is the largest telecommunications operator in the Republic of Ireland. ... Noel Dempsey (Irish: ; born 6 January 1953) is a senior Irish Fianna Fáil politician. ...

    <li id="cite_note-9">'''[[#cite_ref-9|^]]''' Chowdhury, F. L. ‘’Corrupt Bureaucracy and Privatization of Tax Enforcement’’, 2006: Pathak Samabesh, Dhaka. </li></ol></ref>

Unindexed

  • Kosar, Kevin R. (2006), "Privatization and the Federal Government: An Introduction", Report from the Congressional Research Service
  • Bel, Germà (2006), "The coining of `privatization´and Germany's National Socialist Party", Journal of Economic Perspectives 20(3), 187-194
  • Clarke, Thomas (ed.) (1994) "International Privatisation: Strategies and Practices" Berlin and New York: Walter de Gruyter, ISBN 3-11-013569-8
  • Clarke, Thomas and Pitelis, Christos (eds.) (1995) "The Political Economy of Privatization" London and New York: Routledge, ISBN 0-415-12705-X
  • Mayer, Florian (2006) Vom Niedergang des unternehmerisch tätigen Staates: Privatisierungspolitik in Großbritannien, Frankreich, Italien und Deutschland, VS Verlag, Wiesbaden, ISBN 3-531-14918-0
  • Juliet D’Souza, William L. Megginson (1999), "The Financial and Operating Performance of Privatized Firms during the 1990s", Journal of Finance August 1999
  • von Hayek, Friedrich, (1960) The Constitution of Liberty
  • Smith, Adam (1994) The Wealth of Nations
  • Stiglitz, Joseph Globalization and its Discontents
  • David T. Beito, Peter Gordon, and Alexander Tabarrok (editors); foreword by Paul Johnson (2002). The voluntary city: choice, community, and civil society. Ann Arbor: University of Michigan Press/The Independent Institute. ISBN 0-472-08837-8. 

von Weizsäcker, Ernst, Oran Young, and Matthias Finger (editors): Limits to Privatization. Earthscan, London 2005 ISBN 1-84407-177-4


External links

Look up Privatization in
Wiktionary, the free dictionary.
Wiktionary (a portmanteau of wiki and dictionary) is a multilingual, Web-based project to create a free content dictionary, available in over 151 languages. ... Murray Newton Rothbard (March 2, 1926 – January 7, 1995) was an influential American economist, historian and natural law theorist belonging to the Austrian School of Economics who helped define modern libertarianism. ... Kevin Carson is a contemporary American individualist anarchist and author. ...

  Results from FactBites:
 
Web Site of the Department of State Property Management under the Government of the RA (468 words)
We understand the importance of private investment towards the development of a market economy in our country and encourage you to take advantage of some of the opportunities found here.
It is noteworthy that, in accordance with Article 5.2 of the "Law of the Republic of Armenia on the Privatization of State Property", equal investment opportunities are afforded to both foreign and Armenian physical and/or legal entities.
The Department of State Property Management under the Government of the Republic of Armenia is responsible for all privatization activity within Armenia and intends to use this Web Site as a major component of its information dissemination role.
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