Further Lessons from Privatisation
6 Pages Posted: 20 Sep 2004
Privatisation transfers assets from state to private ownership. However, this is not a sufficient action for competitive liberal markets to develop. Indeed, attempts by regulators to impose a structure on industries to promote competition actually inhibit the competitive process from determining the most efficient industrial structure. Privatised industries can still have their objectives determined through the political process. Thus, privatisation, to be fully effective, needs to be supported by other policies that will ensure that competition prevails and that the assets of the industries are used to meet the ends of consumers rather than those of politicians.
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