In the 2016 Cambridge AS Economics syllabus there is a new topic which looks at the areas of privatisation and nationalisation in an economy. Below are some notes on the topic.
Nationalisation is when a government chooses to take an industry into state ownership in order to safeguard the supply of a good or service.
Privatisation is the transfer of ownership of property or businesses from a government to a privately owned entity.
Potential Benefits of Privatisation
- Improved Efficiency – private companies have a profit incentive to cut costs and be more efficient.
- Lack of Political Interference – Governments are motivated by political pressures rather than sound economic and business sense.
- Short Term view – A government many think only in terms of next election
- Shareholders – a private firm has pressure from shareholders to perform efficiently
- Increased Competition – more firms mean greater competition and efficiency
- Government will raise revenue from…
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Utopia, you are standing in it! 
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