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Benefits of Privatization

  • Date Submitted: 07/11/2010 04:46 AM
  • Flesch-Kincaid Score: 43.9 
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In the simplest form, privatization can be defined as a selling government business enterprise (GBE) or state-owned enterprise (SOE) and other governmental enterprise to private sector. While some people argue in favor of privatization and many developed countries implemented privatization, minority of people are still opponent of it. No matter what opponents’ reasons are, privatization should be implemented.
First of all, privatization generates two benefits for public. Firstly, private-owned companies desire to manufacture goods and services in the quality, quantity, price which public prefer. As a result of this, consumer can measure quality and quantity in private goods easier than collective goods. (Savas,nd,p. 50) also, this situation is available for services. Moreover, competition is the most important way for minimizing factor. Unlike SOE, private firm want to attract attention of consumers and the best way for attracting attention is low price. Private-owned companies compete with each other in low price and as a result price decrease. Secondly, instead of wishes of government, resources are used as consumer want. That is, consumers demand the goods, private firms behold the demands, consume resources considering the demands. However, SOE and GBE use resources considering the wishes of government while manipulating goods and the governments’ demands are not changeable. Therefore, while some resources are over distributed, some never distributed. On the other hand, private owned-companies distribute resources equally because when some resources are over distributed, public do not demand anymore and if there is not any demand, private-owned companies do not distribute them and they turn other resources.
Secondly, governments also gain advantage from privatization. First, privatization is the most important element of global phenomenon of increasing use of markets to allocate resources. That is, inactive resources bring back to...


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