2008 Reports

Introduction to "Privatization: Successes and Failures"

Roland, Gerard

Privatization of large state-owned enterprises has been one of the most radical new policies of the last quarter century. While many countries had engaged in large nationalization programs during the decades following World War II, Margaret Thatcher initiated a policy swing in the other direction in the 1980s by pushing for aggressive privatization of many of the large state-owned British firms. In the following two decades, privatization policies were implemented throughout the planet, as both left and right leaning governments alike undertook a policy of privatization. Right wing governments engaged in privatization in an effort to keep down the size of government, while Left wing governments implemented privatization policies in order to generate revenues, and also because they were persuaded of the virtues of markets and competition after being disappointed with the inefficiencies of large state-owned firms. In this way, privatization spread from Europe to Latin America, Asia and Africa, reaching a high point with the transition from socialism to capitalism following the fall of the Berlin wall. Transition economies were then faced with the task of privatizing their whole economies. In theses cases, quite diverse policies were put in place, ranging from a gradual sale of state property to foreign and domestic investors (as was the case in Hungary and Poland) to more radical programs called "mass privatization programs" which resulted in the rapid giveaway of state owned assets.