Th4.3: MOS - Privatisation Flashcards
1
Q
How can privatisation benefit firms?
A
it can end corruption within a firm who is owned by the state, as well as encouraging them to be more efficient by increasing competition
2
Q
How can privatisation benefit governments?
A
selling of a firm, particularly if it is making a loss, will improve government finances and reduce levels of debt
3
Q
What are the two disadvantages of privatisation?
A
monopoly
associated with corruption
4
Q
Monopoly
A
if the firm is privatised as monopoly, there will be no competition within the market
5
Q
Associated with corruption
A
it can be associated with corruption where politicians or officials sell the company at below market price to a friend or family member or receive bribes to accept one company’s bid
