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Objectives of Privatization

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Objectives of Privatization

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  • April 2013
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What are the main objectives and methods of privatisation?
This essay will look at the main objectives and methods of privatisation, it will begin with the brief history of privatisation and how it came about, it will then move onto what privatisation really is by defining it, having done so it will look at the general objectives of privatisation and after this it will move onto the general methods of privatisation, having gone through this it will move onto a case of privatisation in the UK from the 80s onwards, it will discuss the advantages obtained from the privatisation of the enterprise in question and then it will also look at the disadvantages obtained from it and ultimately the essay will conclude on whether the case has been successful or unsuccessful. Before the process of privatisation was introduced in the 1980s, many sectors of business and employment were under government control and ownership, as time went on it became increasingly obvious that this was an inefficient way to control these businesses due to many factors such as instead of making a profit many of these industries required subsidies which added to government spending and that management of these industries became inefficient as they knew that any mishaps or failures would be corrected by the government, which in effect created a morale hazard situation. A major policy change then occurred in the 1980s with the introduction of Privatisation, which has since been replicated in many other countries and refers to the transfer of services traditionally performed by a public entity (government) to privately owned businesses or otherwise where exchangeable property rights of a resource are given by the previous holders (state), to the new holders (private sector), by transferring the responsibility for these services to the economy’s private sector, the policy seeks to create economic efficiency, fully develop the service being provided, make improvements in governments budget and...

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