The Lessons and Future
Privatization has been a part of economic life for a quarter-century now, and seems likely to remain firmly entrenched in the public policy debate for the foreseeable future. What have we learned from this experience, and what lies ahead? Since these questions have been addressed in depth in earlier chapters, we do not attempt a full summary here, but instead provide only a distillation of the key lessons of privatization in the section below. The section after that describes unresolved issues in privatization research. We then close out this work by assessing the likely future course of privatization in the short, medium, and long term.
By definition, privatization represents a change in the ownership of business enterprises from state to private hands. It also invariably represents a sharp break with a past where state ownership of business had been deliberately created, so privatization also implies that a society has changed its mind in an important way. After much theoretical and empirical research, it now seems clear that private ownership is superior to public ownership of commercial enterprise in almost all realistic business settings. Thus the first true lesson of privatization is that state ownership of most productive assets must be considered a historical failure, and the policy of privatization has been adopted in order to improve business performance. The other key lessons of privatization are presented and discussed below.
of a Reform Program
No fewer than 300 empirical analyses of privatization have been produced over the past 15 years, with most of these being performed quite recently. Collectively,