Privatization

Privatization is a process through which the private sector increasingly participates in economic activities that used to be the remit of the state. Privatization processes can occur in many forms, in various degrees, and at different paces: they can be drastic or gradual; exogenous or endogenous; de facto or by design. The contemporary privatization agenda of public services began with neoliberal governments in the 1980s, and extensively penetrated other countries during the 1990s, following the fall of the Berlin Wall. More recently, economic globalization has contributed to disseminating and intensifying privatization processes. In highly competitive economic environments, countries adopt privatization measures for pragmatic and economic reasons, and do not necessarily follow a partisan or ideological rationale. The fact that privatization has often failed to deliver its promised results of efficiency, universal access, and effectiveness is currently making governments more inclined to enact public–private partnerships (PPPs) than drastic privatization initiatives. Nonetheless, in practice, the main differences between PPPs and conventional privatization – in terms of both policy arrangements and social outcomes – are not always appreciable.