Notes prepared by Lori-Rae

Alleyne-Franklin
Nationalised vs Privatised
Prepared by: Lori-Rae Alleyne-Franklin

These notes are to be used in conjunction with a textbook

and other resources.
• This is taking over of private industries or companies by
government and putting them in the ownership and control of
the State.

• Nationalised industries are usually run by boards which must

measure up to guidelines laid down by Acts in Parliament.

Notes prepared by Lori-Rae

Alleyne-Franklin
• Governments nationalize industries for various reasons:
• Nationalisation can bring certain benefits
• Sole ownership of firms make it easier to transfer benefits
• Greater standardization is possible as more efforts can be
channeled into producing the most profitable and efficient
units
• More employment could be created for more citizens.
• Try to prevent the formation of monopolies.
• Those who oppose nationalism give the following reasons:
• Consumers are likely to lose their freedom of choice as
fewer market options would be available.

• Governments may not run large firms as efficient as their

Notes prepared by Lori-Rae

Alleyne-Franklin
private sector counterparts.

• State monopolies are not profit motivated and there are

more likely to fail or go out of business.

• Governments may run industries selfishly for political gain.

• Means the transferring of government-owned business to
private ownership. The move towards this has taken many
different forms. Some of these forms include:
• The sale of government owned assets to the private sector – eg in
Anguilla – ANGLEC.
• Shifting services that were previously carried out by the public

Notes prepared by Lori-Rae

Alleyne-Franklin
sector into the private sector – eg the collection of garbage in
Anguilla, street cleaning, catering for government owned
hospitals.
• Shifting of services that were previously in the government or
non-market sector of the economy to the private or market
sector. For example education and private health care.
• The deregulation of certain sectors such as transportation,
broadcasting and telecommunications. For example the Public
Utilities Commission in Anguilla.
• Why government privatize?

• The sale of State owned assets provide the government which

a short term source of revenue.

• By regarding the income received from the sale of assets as

Notes prepared by Lori-Rae

Alleyne-Franklin
negative expenditure rather than as revenue, the government
is able to reduce the level of public spending and borrowing. If
the government can successfully sell industries that operate at
a loss, then it can significantly reduce public spending on
subsidies.

• Some have argued that State ownership produces particular

forms of abuse that would not be experienced if the industries
were privately owned.
Notes prepared by Lori-Rae
Alleyne-Franklin