Marketization

Jane Gingrich

Marketization involves introducing competition into the public sector in areas previously governed through direct public control. In its broadest usage, marketization refers to the process of transforming an entire economy away from a planned economic system and toward greater market-based organization. This process might include the liberalization of economic activity (e.g., removing price controls), reducing regulation, and opening the system for market-based allocation of resources. In more narrow terms, marketization refers to changes within the public sector, where market mechanisms and incentives are introduced within public or publicly regulated organizations. Marketization, in this sense, might include reforms that introduce contracting out or outsourcing components of public provision, client vouchers, stimulating competition among the providers of goods and services for public funding, or creating incentives for entrepreneurial responsibility in the delivery of goods and services. Marketization, then, can occur in varying degrees, from liberalizing an entire economy or economic sector to ...

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