Privatization
2. Privatization - transfers the ownership of state property into the
hands of private investors. It also comes a sharp increase together
with deregulation.
:Privatization is seen as a way to stimulate gains in economic
efficiency by giving new private owners a powerful incentive-the
reward of greater profits-to search for increases in productivity, to
enter new markets, and to exit losing ones.
:The privatization movement started in Great Britain in the early
1980s when then Prime Minister Margaret Thatcher started to sell
state-owned assets such as British telephone company, British
Telecom. In a pattern that has been repeated around the world, this
sale was linked with the deregulation of the British
telecommunication industry. By allowing other firms to compete
head-to-head with BT, deregulation ensured that privatization did
not simply replace state-owned monopoly with private monopoly.