Privatization Issues | |
Privatization Opportunities Around the World |
Over the past ten years about $535 billion in government assets worldwide
have been transferred to the private sector -- and taxpayers are saving
billions more in reduced operating expenses by contracting with private
firms to provide public services. According to the Reason Foundation's annual privatization report:
Unfortunately, as a 1995 World Bank study found, "State owned enterprises
account for nearly as large a share of developing economies today as 20
years ago." Some 100 countries have organized programs to divest assets, but the United
States is lagging behind. In 1995 alone other countries sold $13 billion
in electric utilities, but the federal government is the largest producer
and distributor of electric power in the U.S.
Experts say privatization not only produces savings for taxpayers, but also
improves efficiency and the quality of services by introducing competition
and freeing operations from bureaucratic rules. For example, the U.S. Postal Service cross-subsidizes weaker operations
with revenues from its first class mail monopoly. By contrast, Sweden privatized
its post office in the late 1980s, and it now operates profitably along
with two competitors. Countries privatizing state-owned companies sell
shares to the public or allow employees to buy the business. New York Governor George Pataki and others claim that the major barrier
to state and local privatization in the U.S. is federal policies that favor
government ownership of infrastructure, such as requiring local governments
to repay immediately federal grants and loans when they sell facilities. Source: John O'Leary, ed., "Privatization 1996," Reason Foundation, 3415 Sepulveda Blvd., Suite 400, Los Angeles, CA 90034, (310) 391-2245.
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