Routledge Dictionary of Economics, Second Edition
The sale of publicly owned assets, especially industrial capital, to private investors. Many countries in the 1980s undertook this kind of reduction of the public sector to achieve a variety of aims: to improve industry by freeing it from bureaucratic state control, to augment public revenue, to widen share ownership, and to increase competition to benefit consumers. One example is the sale of several UK NATIONALIZED INDUSTRIES to the public, notably gas, steel, oil, water, electricity, telecommunications, the state airline, and airports. Examples in other countries include France’s sale of St Gobain, Paribas and Suez, Japan’s sale of its railways and Hungary’s sale of state firms to companies and individuals. Privatization has also taken the form of the sale of state and local authority housing.
In practice, the programme has not met all of its aims.
Competition has not increased as much as was hoped because state monopolies in many cases have become private monopolies, instead of being split into competing companies. Also, some of the assets were sold at less than their market value thus reducing the amount of public revenue received from their sale.
See also: economic devolution
References
Gayle, D.J. and Goodrich, J.N. (eds) (1991) Privatisation and Deregulation in Global Perspective, London: Pinter.
Swann, D. (1988) The Retreat of the State: Deregulation and Privatisation in the UK and USA, Brighton: Harvester Wheatsheaf.
Thompson, D., Kay, I.A. and Mayer, C. (eds) (1986) Privatisation: The UK Experience, Oxford: Clarendon Press.
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