Privatization encompasses those activities/services for which the state or local health department has reached a formal decision to withdraw from or contract out for provision of a public health service, in whole or in part, and a non-governmental entity has taken over responsibility for provision of that service.
Advantages & Disadvantages of Privatization
Economically, adherents claim that privatization, at the micro level, increases efficiency and productivity, enhances product or service quality, expands the range of choice to consumers, spurs innovation, cuts cost, reduces prices, and raises firm profits through the combination of the right incentives, curtailed ...
II. Advantages of Privatization
Top 10 Privatization Pros & Cons – Summary List
| Privatization Pros | Privatization Cons |
|---|---|
| Better product quality | Lack of access to medical equipment |
| Technological progress may be accelerated | May create private natural monopolies |
| Better service quality | Public companies may be sold too cheap |
Disadvantages of privatisation
Privatisation always helps in keeping the consumer needs uppermost, it helps the governments pay their debts, it helps in increasing long-term jobs and promotes competitive efficiency and open market economy.
Following workers employed in 339 privatized firms in Sweden, another study provides evidence that privatization has no effect on wages, while it leads to an increase in the incidence and duration of unemployment.
Privatization has a positive impact on the financial growth of the sector which was previously state dominated by way of decreasing the deficits and debts. The net transfer to the State owned Enterprises is lowered through privatization. It helps in escalating the performance benchmarks of the industry in general.
Definition: The transfer of ownership, property or business from the government to the private sector is termed privatization. The government ceases to be the owner of the entity or business. The process in which a publicly-traded company is taken over by a few people is also called privatization.
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