Public/Private , Regulated/Deregulated

Question 1

Arguments for public ownership?

Answer 1

• owned by state and therefore EOS from natural monopoly
• redistribute income and wealth cuz the govt doesn’t have a profit motive, they prioritise all eff
• in the case of public goods no business would provide the good

Question 2

argument against state ownership?

Answer 2

• all eff leads to less means for dynamic eff
• opportunity cost of profit max
• less incentive for x- efficiency
• govt failure
• lack of profit motive
• cost of nationalisation

Question 3

advantages of privatisation?

Answer 3

• profit motive
• dynamic eff means
• could earn tax rev
• promotes competition

Question 4

disadvantages of privatisation?

Answer 4

• regulation may be needed
• price could rise
• could lead to monopoly abuse as they are short term profit maximisers
• EOS

Question 5

what do regulatory bodies do?

Answer 5

• allow licenses
• quotas
• fines
• prices
• windfall tax
• break up monopolies

Question 6

what is deregulation?

Answer 6

lowers barriers to entry

Question 7

what is economic liberalisation?

Answer 7

opening up markets to private ownership and competition reducing government intervention in the economy

Question 8

what is contractualisation?

Answer 8

services which were previously provided by the public sector such as road cleaning and refuse collection are put to private sector tender and provided by private sector firms

Question 9

what is marketisation?

Answer 9

the provision of goods and services is shifted from the non-market sector to the market sector of the economy

Question 10

what is public private partnership?

Answer 10

partnership between the public and private sector to provide public services