Privatization Discuss the case for and against privatization The case says that privatization affects productive efficiency lower cost over the introduction of market pressures. These are seen creating more flexibility in labor markets, higher productivity and reduced unit labor cost. Bigger share ownership a lower Public sector borrowing requirement (PSBR) easier access to investment capital, more variation and the absence of civil service carelessness are often quoted as advantages of privatization. The case against privatization includes suggestions that state monopolies have often merely been replaced by private monopolies, with little benefit to consumers especially in the case of the public utilities. The loss of scale economies the inability to deal effectively with externalities undervaluation of state assets the subsequent concentration of share ownership and short termism of the city are often quoted as disadvantages of privatization. How important is the type of industry involved in privatization for us to estimate cost and
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