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Chapter 9: Privatization (page 327)

Explain the four policies related to Privatisation.

Short Answer

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  1. Contractualisation
  2. Marketisation
  3. Public-Private Partnership
  4. Private Finance initiative

Step by step solution

01

4 policies related to privatization

  • Contractualisation usually takes place when a service that was previously owned and operated by the state government, such as road cleaning or refuse collection, is put to a private sector tender hence the service itself is provided by a private sector firm, however, the taxpayer still pays taxes for the services provided.
  • Marketization otherwise referred to as commercialization involves the shifting of the provision of goods and services from the non-market sector to the market sector.
  • A public-private partnership(PPP) entails the formation of a partnership between economic agents from the public and the private sector that provide public services.
  • PFI enables governments to seek potential private sector firms or "tenders" for designing, financing, and running infrastructure projects.

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