Privatization

Harvey B. Feigenbaum

According to Stuart Butler, one of its chief advocates, privatization can be thought of as the shift of a function in whole, or in part, from the public sector to the private sector. This can refer to a variety of policies, including the sale of state assets, the contracting out of public services to private providers, the deregulation of various market-based activities, or even the affixing of user fees for places that might earlier have been open access (parks, museums, schools, or highways). This entry discusses alternative conceptions of privatization, assesses the arguments for and against privatization, and examines some attempts by governments to withdraw from involvement in some aspects of their economies. Privatization is not a new phenomenon. While most economists have normally assumed the private sector to be something like a default position, with government activities being invented, added on, and often at the expense of the private ...

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