The Term Privatization - Essay Example

The term Privatization has several meanings. It is the transfer of some sort from the government to the private sector. It is the transfer of government-owned organizations to the private sector, either to a business making profits or even not-for-profit organizations. This term also refers to the sale of shares in government-owned industries to private sector firms or even the general public. Another type of privatization is when the government selects a private organization to deliver services to the general public. This type of privatization is known as outsourcing. The main concept of privatization is to introduce more efficiency in the business places brought in by the private sector. It also involves allowing the private sector to compete with public sector organizations either to supply a product or to take over the activity entirely. There are several benefits of privatization. When several industries are privatized, they compete with each other, and as a result of this competition; they would attract consumers by improving the quality of their products and even lower prices. . Governments usually operate in the form of monopolies and as a result of privatization, demonopolization occurs which further results in free markets and greater choice (Privatization, Web).
Another benefit is that the government can raise revenues by selling its shares. As a result of this, fewer burdens will be placed on citizens in the form of lower taxes. Private individuals who buy these public shares will be able to participate in the decision-making process of these organizations and will be able to change their policies. On the other hand, some people argue that private sector organizations will emphasize more on their profits and not the protection of public rights. They will keep increasing prices to earn greater profits. Opponents also argue that the ownership of some goods should remain in the hands of the government to ensure equality. These goods and services include health care and education facilities. These public goods should be facilitated by the government just as private goods should be provided by the private sector (Economics, pg 107).
Through privatization, governments try to improve the performance of their duties like infrastructure, etc. In the past, privatization has occurred in many different countries. Read More