Pros and cons of privatization?

Question

What are the pros and cons of privatization? Thanks!!

Answer 1

Depends on what you are privatizing. In the US most government run enterprises do not and can not make a profit but are public goods. The latest disclosure is that we have privatized much of the support for the military in Iraq, so there are as many contracted non-Iraqi employees as solders. Then there is Amtrak, the post office and public transit.
So far in Russia the rapid privatization has not produced good economic results. Countries that privatize natural resources are prone to take them back at some later time.The up side of privatization is that the market produces more efficient outcomes in profit making enterprises.

Answer 2

Privatization could potentially be a positive thing as well as a negetive thing. As was stated before, Economies can be strengthened through it. However, one must also consider that economies can suffer from privitization as well.

For example, consider smaller countries will small GDPs such as Jamaica. Jamaica is a small country obviously, and it is suffering financially primarily from businesses coming in from outside the country. How can this be? When a business makes its way into a country such as Jamaica, it's not looking to build the economy, it's looking to get some good business (an unfortunate but true fact). These smaller countries already have few natural resources or limited capabilities of using their natural resources to compete with other countries. So, when the businesses come in, the smaller businesses find themselves completely defeated. It can get even worse like it did in Jamaica where some companies put other local companies out of business and then hired people from out of the country to move to Jamaica and work because the labor was cheaper. That meant that Jamaicans became unemployed.

However, there is a good side to Privatization. It can be very effecient and the focus is greater. There's many things that can be said for the positive side of privatization, but I think it's pretty much already been covered.

That's my 2 cents

Answer 3

In economics, privatization means converting publicly owned or government run corporations or businesses into privately owned and managed businesses. This privatization move is done by government leaders to be able to free itself of this activity that should be best done by the private citizens. One immediate benefit for this is that it eliminates one source of corruption and the government would have more time to concentrate on public administration. This move would encourage private investors to put more money in the financial system and spark the economy towards progress. The government should focus its effort towards achieving and promoting a peaceful, vibrant and progressive economic activities among its consitutuents. Government should demonstrate the real meaning of clean and honest governance so the private sector would be encouraged to emulate the same and achieve a harmonious and prosperous economic activity among all those involve in it.

Privatization is a must for a democratic community where Government concentrates on a healthy economic planning while the private sector concentrates on the healthy implementation of economic projects and the ultimate end of all of these efforts should be the equitable distribution of wealth of the nation.

Answer 4

Lack of government control.

Efficiecny of market.