Nationalisation Flashcards
All about nationalisation
What is nationalisation?
Nationalisation is a deliberate policy in which the government takes control and ownership of private enterprises due to economic, political, social and strategic reasons
Reasons for nationalisation
1.Government can take over the ownership and control of enterprises for reasons like defence,security and political consideration
2.It can take place in other to prevent monopolistic exploitation of the citizens.
3.To prevent foreign dominance of the economy by foreigners
4.For industries to perform efficiently, it may need large capital which can only be provided by the government
5.
Advantages of nationalisation
1.It helps to prevent and eliminate wasteful competition
2.It ensures the equitable distribution of resources as swell as correcting imbalances in the means of production
3.
Disadvantages of nationalisation
- It prevents private initiatives as a result of not being allowed to participate in the control and management of business enterprises
- Lack of competition can prevent low productivity and inefficiency
- The resources can be misallocated as a result of political interference
- Excessive government control of the economy may hinder development