Privatization
Candlefocus EditorWhen governments pursue privatization, the goal is to reduce operating costs, make use of innovative management strategies and maximize efficiency by switching from public ownership to private ownership. It also allows the government to concentrate resources on its core functions, such as providing education, healthcare, and law enforcement services. In most cases, the ultimate goal is to reduce public debt and gain fiscal stability.
Not everyone agrees with the concept of privatization. Opponents of the idea argue that it reduces public services, drives the economy towards further inequality, and enables monopolistic corporations to take control of essential utilities. They also worry that it opens the door to price gouging and a commodification of essential services. Critics of privatization also suggest that basic services, such as education and healthcare, should not be subject to market forces, and that governments should have a special role in such services.
Regardless of one’s opinion on privatization, it has become an important phenomenon on the global economic stage. As governments seek to reduce public debt, many services, utilities and companies have been privatized, and the effects of the phenomenon are being felt in many countries. As governments continue to seek new ways to raise money and balance their budgets, privatization is likely to remain an important consideration.