Privatisation Vs Nationalisation Flashcards
1
Q
Privatisation definition
A
The sale of government equity in nationalised industries.
2
Q
Nationalisation definition
A
When private companies/industries are taken under state control.
3
Q
Advantages of privatisation
A
- Increased competition
- Lower prices
- Less X inefficiency
- Increased gov revenue
- Increased investment due to more certainty (not being run by a gov which changes every 5 years)
- Workers more motivated - more bonuses
4
Q
Disadvantages of privatisation
A
- Externalities
- Inequality
- Natural monopoly better under state control- won’t abuse monopoly power
5
Q
Additional advantage of nationalisation
A
- Minimum quality
6
Q
Additional disadvantage of nationalisation
A
- Moral hazard
