Privatization

Abstract

Privatization is the transfer of publicly owned or publicly operated means of production to private ownership or operation. There are four distinct types of privatization. The most common form is the sale of public assets such as the sale of a state-owned power station, airline, or telecommunications facility. An alternative form of privatization involves the outsourcing of services provision by the state to nonstate agencies. This can be described as a shift in state role from the provision of public goods to that of procurement. Privatization can also refer to a change in the regulatory functions of the state away from state control of markets toward a reliance on and trust in freely operating markets as the appropriate means for the efficient and fair allocation of resources and income. The general shift in attitude away from collective approaches to societal organization, generally involving a prime role for the state, toward more individualized roles and responsibilities is the fourth type of privatization.