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Privatization Policies and Public Enterprise: A Survey

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  • SIMON DOMBERGER
  • JOHN PIGGOTT

Abstract

This paper surveys and analyzes the economic literature on ‘privatization’ policies, restricting coverage to policies designed to improve the operating efficiency of public sector enterprises through increased exposure to competitive market forces. These include asset sales, liberalization (or deregulation) and franchising. The objectives, incentives and constraints of public and private enterprises are examined, and evidence on their comparative performance is analyzed. Public sector revenue effects from asset sale are also explored. On the basis of these considerations, the paper concludes that liberalization is an important ingredient in any policy package designed to improve the operating efficiency of public sector enterprises. Asset sale may enhance the beneficial impact of deregulation but asset sale in the absence of deregulation is unlikely to improve efficiency, and may introduce additional market distortions. Franchising is seen as an appropriate mechanism for privatization when the market is inherently monopolistic and when the government desires to retain control over output and/or price.

Suggested Citation

  • Simon Domberger & John Piggott, 1986. "Privatization Policies and Public Enterprise: A Survey," The Economic Record, The Economic Society of Australia, vol. 62(2), pages 145-162, June.
    • Handle: RePEc:bla:ecorec:v:62:y:1986:i:2:p:145-162
    DOI: 10.1111/j.1475-4932.1986.tb00891.x
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    Cited by:

    1. Robert MILLWARD, 2010. "Public enterprise in the modern western world: an historical analysis," Departmental Working Papers 2010-26, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Bernard THIRY, 1994. "L'Entreprise Publique Dans L'Union Européenne," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 65(3), pages 413-436, July.
    3. Mehdi Jamshidian, 2005. "Productivity Improvement and Strategies for State Owned Enterprises," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 10(2), pages 39-55, fall.
    4. Spriggs, John & Geldard, Jane & Gerardi, Walter & Treadwell, Rhonda, 1987. "Institutional arrangements in the wheat distribution system," Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Archive 316180, Australian Government, Australian Bureau of Agricultural and Resource Economics and Sciences.
    5. Warren Moskowitz & Stephen Yeaple, 1995. "The literature on privatization," Research Paper 9514, Federal Reserve Bank of New York.
    6. Lohmann, Gui & Trischler, Jakob, 2017. "Licence to build, licence to charge? Market power, pricing and the financing of airport infrastructure development in Australia," Transport Policy, Elsevier, vol. 59(C), pages 28-37.
    7. Villalonga, Belen, 2000. "Privatization and efficiency: differentiating ownership effects from political, organizational, and dynamic effects," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 43-74, May.
    8. Alena Podaneva & Pierre Picard, 2023. "Facility Management Services in UK Hospitals: in-house or outsourcing," DEM Discussion Paper Series 23-15, Department of Economics at the University of Luxembourg.
    9. Paul H. Jensen & Robin E. Stonecash, 2005. "Incentives and the Efficiency of Public Sector‐outsourcing Contracts," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 767-787, December.
    10. Kamath Shyam J., 1994. "Privatization: A Market Prospect Perspective," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 5(1), pages 1-52, March.
    11. Mehdi Jamshidian, 2005. "Productivity Improvement and Strategies for State Owned Enterprises," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 10(1), pages 43-60, spring.
    12. Kotsios, Panayotis, 2010. "Regulatory Barriers to Entry in Industrial Sectors," MPRA Paper 27976, University Library of Munich, Germany.
    13. Siegmund, Uwe, 1997. "Warum Privatisierung? Eine Dogmengeschichte der Privatisierungstheorien," Kiel Working Papers 785, Kiel Institute for the World Economy (IfW Kiel).

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