Privatization: meaning, definitions and examples
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privatization
[ˌpraɪvətaɪˈzeɪʃən ]
Definitions
economy
The transfer of a business, industry, or service from public to private ownership and control.
Synonyms
denationalization, disinvestment, outsourcing.
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| privatization |
Privatization is used when a government transfers the ownership of a business or property to private individuals or organizations. It often refers to large-scale, systematic changes such as selling state-owned enterprises.
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| denationalization |
Denationalization is similar to privatization, but it specifically refers to the process of reversing nationalization. This means returning state-controlled assets or industries to private ownership. It is often used in historical or policy discussions.
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| disinvestment |
Disinvestment involves the withdrawal or reduction of investment, often by the government selling its stakes in companies. It can be partial or complete and may not necessarily lead to full privatization.
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| outsourcing |
Outsourcing refers to a practice where services or job functions are contracted out to a third party. This is often done to reduce costs, improve efficiency, or focus on core business areas. It doesn't involve changing ownership of the company.
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Examples of usage
- The privatization of state-owned enterprises has been a key policy in many countries.
- Privatization can lead to increased efficiency and competition in the market.
- Opponents argue that privatization can result in job losses and reduced access to essential services.
government
The process of transferring governmental control and ownership of services or assets to the private sector.
Synonyms
commercialization, corporatization, deregulation.
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| privatization |
This term is appropriate when referring to the process of transferring ownership of a business, enterprise, agency, or public service from the government to the private sector.
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| deregulation |
This word should be used when describing the removal or simplification of government rules and regulations that constrain the operation of market forces.
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| commercialization |
Use this word when discussing the process of bringing new products or services to market, often emphasizing the intent to generate profit.
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| corporatization |
This term is best used when talking about transforming a state-owned enterprise or organization into a corporation, particularly when it starts operating under private sector rules.
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Examples of usage
- The privatization of healthcare services has been a controversial issue in many countries.
- Privatization of prisons has raised concerns about profit-driven incarceration.
- The government announced the privatization of the national railway network.
Interesting Facts
Historical Origins
- The concept emerged in the late 20th century, especially during the 1980s, when many governments began selling off state-owned enterprises.
- In the UK, Margaret Thatcher's government notably pushed privatization as a way to increase efficiency and reduce government spending.
- The transition of former communist countries in Eastern Europe to market economies involved extensive privatization efforts.
Economics
- Proponents argue that privatization fosters competition, leading to better services and lower prices.
- Critics often highlight the risk of creating monopolies, where one company controls the market and can charge whatever they want.
- Economists debate whether privatization truly leads to cost savings, as it might also result in increased fees and reduced public access.
Pop Culture
- Movies and books like 'The Big Short' explore themes of privatization, particularly in the context of the 2008 financial crisis.
- Comedians often critique privatization through satire, highlighting its effects on public services like education and healthcare.
- Popular media sometimes depicts privatization as a plot device in dystopian stories, reflecting fears of corporate control.
Global Perspectives
- Countries like Chile and New Zealand adopted privatization policies extensively during the late 20th century, reshaping their economies.
- In India, privatization has aimed to modernize industries and attract foreign investments, influencing global business dynamics.
- In contrast, some nations, particularly in Scandinavia, resist privatization, preferring strong public ownership to ensure social welfare.
Arguing the Effects
- Supporters claim privatization can lead to innovation, as businesses strive to improve services to attract customers.
- However, some studies suggest privatization can lead to job loss in the public sector as operations are streamlined for profit.
- There is ongoing debate about whether privatized services maintain quality, especially in essential areas like healthcare and education.
Translations
Translations of the word "privatization" in other languages:
🇵🇹 privatização
🇮🇳 निजीकरण
🇩🇪 Privatisierung
🇮🇩 privatisasi
🇺🇦 приватизація
🇵🇱 prywatyzacja
🇯🇵 民営化
🇫🇷 privatisation
🇪🇸 privatización
🇹🇷 özelleştirme
🇰🇷 민영화
🇸🇦 خصخصة
🇨🇿 privatizace
🇸🇰 privatizácia
🇨🇳 私有化
🇸🇮 privatizacija
🇮🇸 einkavæðing
🇰🇿 жекешелендіру
🇬🇪 პრივატიზაცია
🇦🇿 özəlləşdirmə
🇲🇽 privatización