The role of privatization in improvement
Indianapolis opened up five dozen city services to competitive bidding, including trash collection, pothole repair, and waste water services. They will be found where competition and organizational mechanisms ensure that managers do what we, the owners, want them to do.
Viewed in that context, the pros and cons of privatization can be measured against the standards of good management—regardless of ownership.
Contracts must be well-designed with performance standards that create incentives for high quality service. In particular, Michael C. Public utilities such as gas, water, electricity, and sanitation services are provided to citizens nationally through a combination of public, private, and quasi-public entities. The debate over privatization needs to be viewed in a larger context and recast more in terms of the recent argument that has raged in the private sector over mergers and acquisitions. China has consistently been one of the top privatizers from to ; it was the second-largest privatizer in and the first in , , as well as the 8-month period of January to August John B. This represents more than one-third of the global annual totals in , but is only Currently, there are efforts to provide vouchers in education and Medicare , where seniors would choose health insurance from private insurers. The question is not whether to privatize government services, but which services, if any, would be better provided by private contractors acting on behalf of the government. First, a growing number of governments in SSA started to undertake significant economic reforms, under the aegis of the World Bank and the IMF, in which privatization was an integral part. But we have let the mania for privatization, and the willingness of politicians to pander to anti-government sentiment, to take it too far. Rather, a number of factors have been found to influence the success of privatization, namely: Which firms are privatized; there can be a positive or negative selection effect.
Comparing Pre-post Divestment Sales and Income Data for Companies Privatized by Public Share Offering This set of studies examines the effects of privatization on firm performance by comparing pre- and post-divestment data for companies privatized via public share offerings. Unfortunately, history is also full of examples where government services are bureaucratic, excessively expensive, and unresponsive to citizen needs.
Public owners often defer maintenance due to political considerations, increasing overall long-term costs.
To control for the possibility that better firms are selected for privatization, these authors compare the pre-privatization performance of managerially-controlled firms with those controlled by other owners.
In addition, important political liberalization, with multi-party elections, broke with the previous statist policies, and created some room for maneuver to implement privatization programs.
based on 7 review