Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

Advantages and Disadvantages of Privatization in Economy
Privatization is a process in which the private sector acquires ownership and administration of the
public sector or transfers ownership and management to the private sector, and economic democracy
is achieved by limiting government authority over economic operations
...
The fact that privatization is a significant
approach for economic revitalization in even communist countries attests to privatization's economic
relevance
...
The primary benefit of privatization is that it generates financial resources for
the government to disinvest in public-sector firms
...
The public sector has been observed to have failed to make the
best use of national resources
...

Fostering Competition
...
It leads to
inefficiency and loss
...

Reduce Fiscal Burden
...

Economic Democracy
...
It aids in attracting
additional private-sector resources
...

Better Industrial Relations
...
As a result, the firms may be subjected to more public scrutiny
...
The privatization process decreases political influence in publicsector firms by increasing private-sector presence in public-sector management
...
Public enterprises have become linked with bureaucracy
...

More Productivity
...


Economical
...

Individual Motivation
...
Privatization pushes
managers to make the enterprise's operations more efficient so that they may earn more and more
profits
...
The government often seeks to sell the least profitable firms, those that the private
sector is unwilling to purchase at a price acceptable to the government
...
Disinvestment tends to elicit political opposition from employees who
may lose their jobs, politicians who fear short-term unemployment as a result of cost-cutting by
private owners, bureaucrats who stand to lose patronage, and members of the public who are
concerned that national assets are being threatened by foreigners, the wealthy, or a specific ethnic
group
...
In developing nations, the lack of an established capital market makes it difficult
for governments to float shares and for private purchasers to fund significant purchases
...
The fundamental drawback of the private sector is that it has fallen well short of
what it is capable of or has accomplished in other nations
...

Again, many firms engage in unfair methods, which frequently culminate in the development of black
money and corruption
...

Interdependence on Government
...
This has kept competition from becoming a widespread economic phenomenon
...
This has cast doubt on the private sector's ability to stand on its
own
...
Another issue with the private sector is that its costs are generally high, and
product prices are too high
...

The high cost of manufacturing is due, in part, to bad technology and, in part, to poor management
...


Concentration of Economic Power
...
The capital and asset domination of some corporate groupings is
an economic and social concern
...
It is detrimental to both
customers and society as a whole
...
The recurrence of industrial conflicts, which impedes the smooth growth of
enterprises, is an undesirable characteristic of the private sector
...
The negative repercussions
include evident work stoppages that result in the nation's usage of capital equipment, idle labor,
manpower waste, loss of output, law and order issues, and so on
...
Textile, engineering, chemical, iron, and steel sectors, as well as individuals, are
affected by industrial disease
...
It harms the industrial environment
...
Privatization does not ensure the success of a single unit
...

Ambulance Development
...

As a result, individual units are concentrated in a few regions
...




---