Problem

Privatization of public services

Other Names:
Privitization of public services
Privatization of state monopolies
Privatization of satellite systems
Nature:

Transfer of government-held assets to the private sector, whether local or foreign. Where economies of scale result in a natural monopoly, privatization results in the creation of a private monopoly with few gains in efficiency and competitiveness and with a deterioration in public accountability.

Incidence:

[Industrialized countries] France cut its budget for the state sector from FFr23 billion in 1986 to FFr5 billion in 1990. By 1993, it had been announced that 20 of the biggest companies -- including Air France and Renault -- would be privatized. It is argued that European countries heavy social security payment and the cost of the Gulf war have made it harder for them to balance their budgets and so increased the likelihood of privatization of state industries. The UK, Spain and Portugal have all sold some of the biggest nationalized industries in the early 1990s. France has agreed to allow private investors to take a stake of up to 49% in state businesses, provided they meet certain conditions. By early 1994 Russia claimed to have successfully privatized 11,000 of its largest state-owned industrial enterprises to the benefit of all the citizens of Russia.

Related UN Sustainable Development Goals:
GOAL 9: Industry, Innovation and InfrastructureGOAL 10: Reduced InequalityGOAL 16: Peace and Justice Strong Institutions
Problem Type:
D: Detailed problems
Date of last update
28.07.2020 – 19:47 CEST