Privatisation Flashcards
1
Q
Define privatisation?
A
Privatisation involves selling state-owned assets to the private sector
2
Q
How does privatisation potentially improve economic efficiency?
A
profit incentive-cut costs and be more efficient-x-efficiency and productive efficiency
3
Q
Policies alongside privatisation
A
Deregulation-increase in competitiveness-lower prices-more output-increasing societal welfare
4
Q
Effects of privatisation on a natural monopoly
A
High prices and inefficiencies-“better public than private monopoly”
5
Q
Evaluation of privatisation
A
Industry (public interest?)
Contestability
THE REGULATOR
6
Q
Problem with privatisation (monopoly)
A
Lead to higher prices-less alloc- efficiency-regressive impacts-government failure
