Privatization
Privatization is the act of opening up previously state-owned corporations, assets, service or economic sector to private enterprise, though it can also be used to refer to public private partnerships, such as operating concessions, or Build Operate Transfer schemes. Privatization has been encouraged by the IMF and World Bank in both wealthy and developing nations since the Second World War, but particularly since the 1980's. It is mostly responsible for the transformation of poor quality public services delivered in a top-down authoritarian manner to customer-focused, flexible, innovative, more efficient and transparent services, as well as unlocking the potential of private sector profit-focused investment that have transformed services such as water and telecoms in the developing world.
As well as proving economic and quality of life benefits to citizens in developing countries, it is a major factor in improving rule of law, accountability, transparency, democracy and personal freedoms, by integrating the economies of developing countries with those of the west, thus leading to greater incentives to reconcile regulatory, legal and political standards, as well as encouraging the local population to accept responsibility for development of their country, through participating in an opening market and thus directly affecting the way these services are provided by exercising their consumer choice in service provision, and by making stock investments in publicly traded, rather than state monopolist utilities.
Not all privatization programs have been successful. For instance, the Dulles Greenway in Virginia has not turned a profit. The reason may be excessive government regulation, or the fact that there are so many competing free roadways operated by the State. Or it may have simply been mismanaged; failure sometimes occurs in the private sector just as it sometimes does in the public sector.
Some products, such as national defense, are deemed to be public goods whose production cannot be feasibly privatized. However, this is controversial. Some economists, such as Murray Rothbard, hold that all government services can and should be privatized, with citizens and businesses contracting directly with private firms for protection.
