Privatization: The hows and whys

Journal Article · Mon Feb 01 04:00:00 EST 1993 · Public Utilities Fortnightly; (United States)

OSTI ID:6681119

Hyman, L S

To most people, privatization means the sale of a government-owned asset or company to private investors. What actually ensues may encompass reorganizing the industry, breaking up existing entities, rewriting the rules of regulation, bringing in new orders, selling assets, and encouraging private firms to supply services to government-owned utilities. Restructuring might be a more descriptive term for the process. That term encompasses altering industry structure while privatization focuses on ownership; there is more to this business than just changing owners. For ideologues, privatization is an end in itself. For everyone else, it is a procedure designed to help a country achieve a set of goals, which include more participation by small investors in the economy, greater efficiency, encouragement of entrepeneurial activities, attraction of needed capital, and the introduction of technological expertise. Perhaps public utilities seem unlikely candidates for privatization. They do not require as much entrepeneurial management as firms in other sectors, they do not have to be technological pioneers, yet they do provide a public service. They also require huge sums of capital, governments rarely have the money at hand to expand them, and private owners with more business experience than civil servants can make even these firms more efficient. On those grounds alone, privatization could provide benefits to the host country.

• OSTI ID: 6681119
• Journal Information: Public Utilities Fortnightly; (United States), Journal Name: Public Utilities Fortnightly; (United States) Vol. 131:3; ISSN PUFNAV; ISSN 0033-3808
• Country of Publication: United States
• Language: English

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