Who Benefits from Privatisation?

Who Benefits from Privatisation?

Who Benefits from Privatisation?

Who Benefits from Privatisation?

Synopsis

These essays analyze the benefits and losses of privatization in a variety of countries, from economic, legal and consumer perspectives. The book explores questions such as whether private ownership necessarily leads to better management and productivity incentives.

Excerpt

Privatisation was the policy fashion of the 1980s and 1990s. It captivated governments in both developed and developing economies. The USA was also affected despite a relatively low pre-existing level of government ownership of industries and utilities. There the monopoly and virtual monopoly utilities were ‘deregulated’ and subjected to competition. The attraction of privatisation to governments that owned vast profit-making utilities was obvious. Asset sales led to huge injections of cash into their treasuries allowing them to fund election promises without having to increase taxes (and sometimes allowed tax reductions). This undoubtedly improved the re-election prospects of the privatising governments.

Privatisation also brought pain. Governments invariably introduced efficiencies into their utilities to make them more attractive for sale. This usually involved laying off hundreds, and sometimes thousands, of workers. In many instances the public was sceptical about the benefits that privatisation would bring. They were assured by their governments that privatisation would bring competition and improved efficiency, which itself would lead to competitive prices and improved service delivery. The question is, has it? The answer, which is examined in this book, reveals varied outcomes. In some cases consumers have benefited, in others the benefits have not materialised.

This book considers the alleged and real benefits of privatisation in a number of countries, including the UK, Australia, India, Malaysia, New Zealand and Sweden. It also considers the US deregulatory experience. In addition, the public obligations of privatised corporations and the economics of privatisation are considered and regulatory measures are proposed for the protection of consumers from some of the consequences of privatisation.

The genesis of this book was a conference the editors organised in Brisbane, Australia, in March 1996. The conference considered the lessons Australia could learn from countries that had preceded her with privatisation, and what could be learnt from the Australian experience itself. Speakers attended from around Australia and from Malaysia, New Zealand and the UK. This book includes a number of papers from the conference as well as chapters solicited from commentators in the USA, Sweden and India.

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