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Finance & Accounting
Pages 4 (1004 words)
Privatisation First Name / Last Name School Affiliation Course Professor Date of Submission Privatisation Privatisation involves the transfer of ownership and the management of state owned enterprises to private firms. Governments should be less corrupted so as to increase the efficiency of state owned corporations and the public sector, promoting national security.
However, due to limited budgets, governments have been unable to develop all part of the economy equally. Further problems like inadequate use of knowledge, experience and specialization in the management of the various sectors occur and citizens may not receive goods and services from the public enterprises effectively. Lack of competition in the public sector contributes a great deal in the inefficiencies, corruption and lack of motivation in public enterprises (Khan et al., 2012). The main reason governments have opted for privatization is the belief that private firms can make a more efficient and effective use of available resources than governments and at the same time profit the government from the higher revenues privatisation creates. It is also believed that privatisation may result to increased efficiency productivity and liquidity in the financial markets but on the other hand, lead to unemployment and dependency on foreign capital from multinational companies hence decline in a nation’s wealth and social welfare (Han, 2012). Full privatisation may have occurred especially in the services sector but it is generally not ideal for governments to conduct a full privatisation. ...
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