Privatisation Essay

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The third reason for privatisation was to develop resourcefully working markets. Welfare economics (Ofcom, 2011) argues that efficiency is achieved during a competitive market, so if competition is promoted then privatisation can be vital to efficiency effects. "Liberalisation and deregulation should be possible in order to have an efficient private sector and the cause for this is due to the initially nationalised enterprises are frequently monopolies," (Affuso, 2009, p. 222). So one can assume that some nationally governed monopolies were privatised and turned into private monopolies such as water, gas, utilities and railways.
Furthermore, the prospect of deregulation and liberalization can possibly continue independent of the private sector. “For example, there could be a level of liberalisation if limitations on imports are lifted and regulations are removed that had previously delayed competition,” (Boardman, 2013, p. 30). Which ties in very well with the citation in the introduction by Robinson (2006) that points out that if an item or assets is owned by everyone, then it is really owned by no-one.
Forth reason is that politicisation existed where there was corporate managers. Government will be responsible for those enterprises which leads to lasting political influence over the corporation`s management, therefore, lobbying is a constrain for efficiency maximisation.
Let's examine the privatisation carried out by the British Conservative governments. When reviewed (Holder, 2012) it will show that it worked out to be a good example of interaction among pressure groups and government, with little regard for the consumers' interest. This definitely proves that political objectives are likely going to lead government acti...

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...lection. The industry regulatory bodies had established the Mergers Commission to bring forward the task of liberalisation. In addition to privatisation schemes there will always be a domination by political objectives which is usually carried out by governments. It is clear that a move from public ownership, which has some drawbacks ,to private ownership is potentially incredibly beneficial to consumers. Hard to believe! On the other hand, in order to ensure that these expansions are realised, market liberalisation is essential as a complementary policy. Even if privatisation wasn't accompanied by initial liberalisation, then in the long run it may possibly result in the appearance of a competitive market if there aren't barriers. However I believe that politics seems to be more important than the economics and especially does not include the consumer`s well being.

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