Privatisation arguments
- Created by: Jade
- Created on: 17-11-12 20:26
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- Privatisation
- Transport is an essential service
- Private sector - more efficient - more likely to operate where P=MC
- The natural monopoly argument
- Privatisation would allow businesses to focus more on long-term planning.
- Large external benefits ignored by private firms
- Privatisation - new source of investment funding for transport
- Arguments against privatisation
- Net welfare effect is uncertain
- Privatised companies have conflicting stakeholder objectives
- Long term - sold off 'family silver'
- Arguments for Privatisation
- Losses turn into profits
- Contestable market argument
- The lack of empirical evidence to support privatisation
- Private sector firms now have the profit that encourages technical efficiency
- Private monopolies will replace public monopolies
- Process by which a state-owned organisation or activity is sold off to the private sector
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