Privatization

Definition

Privatization is the process by which public assets or services are transferred to private ownership and control, often seen as a way to increase efficiency and reduce government spending in managing various sectors. It typically involves the sale of government-owned enterprises to private investors.

Related terms

Public goods: Goods or services provided without profit to all members of a society, either by the government or a private individual or organization.

Collective action problem: A situation where individuals' personal interests conflict with the group's interest, leading to suboptimal outcomes when everyone acts independently rather than cooperatively.

Market failure: A situation in which the allocation of goods and services by a free market is not efficient, often justifying government intervention