9. Public corporations and privatisation Flashcards

1
Q

Define the term public corporation

A

A business organisation owned and controlled by the state or government

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2
Q

What are the characteristics of public corporations?

A

State owned-owned by the government
Created by law- created by an Act of Parliament
Incorporation- have a separate legal identity
State-funded- government provides the capital needed mainly from tax
Provide public services- do not aim to make a profit
Public accountability- they have to produce an annual report which is submitted to the government minister in charge.

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3
Q

Reasons for the public ownership of businesses

A

Avoiding wasteful duplication
Maintaining control
Saving jobs
Filling gaps left by the private sector
Serve unprofitable regions

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4
Q

Reasons against the public ownership of businesses

A

Cost to government
Inefficiency
Difficult to control

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5
Q

Define the term privatisation

A

The transfer of public sector resources to the private sector

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6
Q

what are the forms where privatisation can take place?

A

Sale of public corporations
Deregulation
Contracting out
The sale of land and property

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7
Q

Why does privatisation take place?

A

To generate income
To reduce inefficiency
As a result of deregulation
To reduce political interference

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8
Q

Effect of privatisation

A

Increase efficiency therefore quality will increase
The price of products will decrease
They will be profit-orientated
Businesses will increase investments
Businesses will diversify into new area
Revenue to the government will increase

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