Editing Privatization (section)

== Results of privatization ==
Privatization had different outcomes around the world. Results of privatization may vary depending on the privatization model employed.<ref>Alen Jugovič, Ante Bistričić & Borna Debelić (2010) Economic Effects
of Privatisation of Public Services Sector in the Republic of Croatia Emphasising MaritimePassenger Traffic, Economic Research-Ekonomska Istraživanja, 23:4, 114–126, DOI:
10.1080/1331677X.2010.11517437</ref> According to [[Irwin Stelzer]], "it is somewhere between difficult and impossible to separate the effects of privatisation from the effects of such things as trends in the economy".<ref>Stelzer, I. (2000). [https://iea.org.uk/publications/research/a-review-of-privatisation-and-regulation-experience-in-britain A review of privatisation and regulation experience in Britain] {{Webarchive|url=https://web.archive.org/web/20180220033519/https://iea.org.uk/publications/research/a-review-of-privatisation-and-regulation-experience-in-britain |date=2018-02-20 }}. Institute of Economic Affairs (IEA), Beesley series. Presentation at London Business School, 7 Nov 2000, Beesley series of lectures on regulation.</ref>

According to research performed by the [[World Bank]]<ref name=nellis_kikeri>{{cite journal |ssrn=636224 |title=Privatisation in Competitive Sectors: The Record to Date, World Bank Policy Research Working Paper No. 2860 |journal=John Nellis and Sunita Kikeri |date=June 2002 |last1=Kikeri |first1=Sunita |last2=Nellis |first2=John }}</ref> and [[William L. Megginson]]<ref name=megginson_netter>{{cite news |url=http://faculty-staff.ou.edu/M/William.L.Megginson-1/prvsvpapJLE.pdf |title=From State To Market: A Survey Of Empirical Studies On Privatisation |work=William L. Megginson and Jeffry M. Netter |date=June 2001 |publisher=Journal of Economic Literature |url-status=dead |archive-url=https://web.archive.org/web/20051002001503/http://faculty-staff.ou.edu/M/William.L.Megginson-1/prvsvpapJLE.pdf |archive-date=2005-10-02 }}</ref> in the early 2000s, privatization in competitive industries with well-informed consumers, consistently improved efficiency. According to [[APEC]], the more competitive the industry, the greater the improvement in output, profitability, and efficiency.<ref name=oecd>{{cite web |url=http://www.apec.org.au/docs/10_TP_PFI%204/Privatising%20SOEs.pdf |title=Privatising State-owned Enterprises |access-date=2011-07-11 |date=2010-02-22 |page=9 |archive-url=https://web.archive.org/web/20110909125124/http://www.apec.org.au/docs/10_TP_PFI%204/Privatising%20SOEs.pdf |archive-date=2011-09-09 |url-status=dead }}</ref> Such efficiency gains mean a one-off increase in [[Gross domestic product|GDP]], but through improved incentives to innovate and reduce costs also tend to raise the rate of [[economic growth]].{{Citation needed|date=October 2020}}

More recent research and literature review performed by Professor Saul Estrin and Adeline Pelletier concluded that "the literature now reflects a more cautious and nuanced evaluation of privatization" and that "private ownership alone is no longer argued to automatically generate economic gains in developing economies".<ref>{{cite journal| title=Privatization in Developing Countries: What Are the Lessons of Recent Experience?|author=Saul Estrin|author2=Adeline Pelletier|date=22 March 2018|journal=The World Bank Research Observer}}</ref> According to a 2008 study published in ''Annals of Public and Cooperative Economics'', liberalization and privatization have produced mixed results.<ref>{{cite journal|title=Liberalization and privatization of public utilities: origins of the debate, current issues and challenges for the future|journal=Annals of Public and Cooperative Economics|author=Giuseppe Bognetti|author2=Gabriel Obermann|volume=79|pages=461–485|date=11 September 2008|issue=3–4|doi=10.1111/j.1467-8292.2008.00367.x|s2cid=153538881|doi-access=free}}</ref>

Although typically there are many costs associated with these efficiency gains,<ref>{{cite news |url=http://www.cgdev.org/docs/cgd_wp006.pdf |title=Winners and Losers: Assessing the Distributional Impact of Privatisation, CGD Working Paper No 6 |work=Nancy Birdsall & John Nellis |date=March 9, 2006 |publisher=Center for Global Development |access-date=2005-06-23 |archive-url=https://web.archive.org/web/20050623081056/http://www.cgdev.org/docs/cgd_wp006.pdf |archive-date=2005-06-23 |url-status=dead }}</ref>
many economists argue{{who|date=October 2020}} that these can be dealt with by appropriate government support through [[Redistribution (economics)|redistribution]] and perhaps [[retraining]].{{citation needed|date=March 2020}} Yet, some empirical literature suggests that privatization could also have very modest effects on efficiency and quite regressive distributive impact. In the first attempt at a social welfare analysis of the British privatization program under the Conservative governments of [[Margaret Thatcher]] and [[John Major]] during the 1980s and 1990s, [[Massimo Florio]] points to the absence of any productivity shock resulting strictly from ownership change. Instead, the impact on the previously nationalized companies of the UK productivity leap under the Conservatives varied in different industries. In some cases, it occurred prior to privatization, and in other cases, it occurred upon privatization or several years afterward.<ref>{{Cite journal |jstor = 30032311|last1 = Evenson|first1 = Robert E.|title = Reviewed work: The Great Divestiture: Evaluating the Welfare Impact of the British Privatizations, 1979–1997, Massimo Florio|journal = Journal of Economic Literature|volume = 44|issue = 1|pages = 172–174|last2 = Megginson|first2 = William L.|year = 2006}}</ref>

A 2012 study published by the [[European Commission]] argues that privatisation in Europe had mixed effects on service quality and has achieved only minor productivity gains, driven mainly by lower labour input combined with other cost cutting strategies that led to a deterioration of employment and working conditions.<ref>{{cite book|url=https://op.europa.eu/en/publication-detail/-/publication/0293d6e5-8b71-4001-b065-21641a5ce10a|title=Liberalisation and privatisation in the EU|date=10 November 2012|author=Dominik Sobczak|author2=Elke Loeffler|author3=Frankie Hine-hughes|publisher=Publications Office of the European Union|isbn=978-9279216367}}</ref> Meanwhile, a different study by the commission found that the UK rail network (which was privatized from 1994 to 1997) was most improved out of all the 27 EU nations from 1997 to 2012. The report examined a range of 14 different factors and the UK came top in four of the factors, second and third in another two and fourth in three, coming top overall.<ref>{{cite web |url=http://www.networkrail.co.uk/news/2013/apr/European-rail-study-report/ |title=European rail study report |access-date=2016-02-01 |archive-url=https://web.archive.org/web/20151117022327/http://www.networkrail.co.uk/news/2013/apr/European-rail-study-report/ |archive-date=2015-11-17 |url-status=dead }}</ref> Nonetheless, the [[impact of the privatisation of British Rail]] has been the subject of much debate, with the stated benefits including improved customer service, and more investment; and stated drawbacks including higher fares, lower punctuality and increased rail subsidies.<ref>{{cite web|url=http://www.networkrail.co.uk/about/performance/|title=Performance and punctuality (PPM) – Network Rail|access-date=20 November 2015|archive-url=https://web.archive.org/web/20151208114925/http://www.networkrail.co.uk/about/performance/|archive-date=8 December 2015|url-status=dead}}</ref><ref>{{cite web|url=https://www.globalrailwayreview.com/news/4832/92-of-uk-trains-arrive-on-time/|title=92% of UK trains arrive on time|website=Global Railway Review|language=en|access-date=2019-01-16}}</ref><ref name="bbc.co.uk">[https://www.bbc.co.uk/news/magazine-21056703 Have train fares gone up or down since British Rail?] {{Webarchive|url=https://web.archive.org/web/20180314152818/http://www.bbc.co.uk/news/magazine-21056703 |date=2018-03-14 }}, [[BBC News]], 22 January 2013</ref>

Privatizations in Russia and Latin America were accompanied by large-scale corruption during the sale of the state-owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have widely reported the grand corruption that accompanied those sales, according to research released by the World Bank there has been increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption is more prevalent in non-privatized sectors. Furthermore, according to the World Bank extralegal and unofficial activities are more prevalent in countries that privatized less.<ref>Privatisation in Competitive Sectors: The Record to Date. Sunita Kikeri and John Nellis. World Bank Policy Research Working Paper 2860, June 2002. <!-- dead: http://www.econ.chula.ac.th/about/member/sothitorn/privatisation.pdf --> [http://idei.fr/doc/conf/veol/straub_martimort.pdf Privatisation and Corruption] {{Webarchive|url=https://web.archive.org/web/20110718134340/http://idei.fr/doc/conf/veol/straub_martimort.pdf |date=2011-07-18 }}. David Martimort and Stéphane Straub.</ref>{{full citation needed|date=October 2020}} Other research suggests that privatization in Russia resulted in a dramatic rise in the level of economic inequality and a collapse in GDP and industrial output.<ref>{{cite journal|last=Holmstrom|first=Nancy|author2=Richard Smith|date=February 2000|title=The Necessity of Gangster Capitalism: Primitive Accumulation in Russia and China|journal=Monthly Review|publisher=Monthly Review Foundation|volume=51|issue=9|page=1|doi=10.14452/MR-051-09-2000-02_1|url=http://monthlyreview.org/2000/02/01/the-necessity-of-gangster-capitalism|url-access=subscription}}</ref>

Russian President [[Boris Yeltsin]]'s [[IMF]]-backed rapid privatization schemes saw half the Russian population fall into destitution in just several years as unemployment climbed to double digits by the early to mid 1990s.<ref>{{cite book |last=Mattei|first=Clara E.|date=2022 |title=The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism|pages=301–302|url=https://press.uchicago.edu/ucp/books/book/chicago/C/bo181707138.html|location= |publisher=[[University of Chicago Press]]|isbn=978-0226818399|quote="If, in 1987–1988, 2 percent of the Russian people lived in poverty (i.e., survived on less than $4 a day), by 1993–1995 the number reached 50 percent: in just seven years half the Russian population became destitute}}</ref> A 2009 study published in ''[[The Lancet]]'' medical journal has found that as many as a million working men died as a result of economic shocks associated with mass privatization in the former [[Soviet Union]] and in [[Eastern Europe]] during the 1990s,<ref>{{cite web |url=http://www.ox.ac.uk/media/news_stories/2009/090115.html |title=Death surge linked with mass privatisation |publisher=[[University of Oxford]] |date=2009 |archive-url=https://web.archive.org/web/20140702113600/http://www.ox.ac.uk/media/news_stories/2009/090115.html |archive-date=2014-07-02 |access-date=2015-06-28 |url-status=dead}}</ref><ref>[http://news.bbc.co.uk/2/hi/health/7828901.stm Privatisation 'raised death rate'] {{Webarchive|url=https://web.archive.org/web/20160306005653/http://news.bbc.co.uk/2/hi/health/7828901.stm |date=2016-03-06 }}. ''[[BBC]],'' 15 January 2009. Retrieved 29 June 2014.</ref> although a further study suggested that there were errors in their method and "correlations reported in the original article are simply not robust."<ref>{{cite journal |title=Did mass privatisation really increase post-communist mortality? |doi=10.1016/S0140-6736(10)60159-6 |pmid=20113819 |volume=375 |issue=9712 |pages=372; author reply 372–374 |journal=The Lancet |date=2010-01-30 |last1=Earle |first1=John S. |last2=Gehlbach |first2=Scott |s2cid=35337211 |doi-access=free }}</ref> A subsequent body of scholarship, while still controversial, demonstrates that rapid privatization schemes associated with [[neoliberal]] economic reforms did result in poorer health outcomes in former Eastern Bloc countries during the transition to markets economies, with the [[World Health Organization]] contributing to the debate by stating "IMF economic reform programs are associated with significantly worsened tuberculosis incidence, prevalence, and mortality rates in post-communist Eastern European and former Soviet countries."<ref>{{cite book  |last1=Ghodsee|first1=Kristen|last2=Orenstein|first2=Mitchell A.|author-link1=Kristen Ghodsee|date=2021|title=Taking Stock of Shock: Social Consequences of the 1989 Revolutions|url=https://oxford.universitypressscholarship.com/view/10.1093/oso/9780197549230.001.0001/oso-9780197549230|location=New York|publisher=[[Oxford University Press]]|page= 84|doi=10.1093/oso/9780197549230.001.0001 |isbn=978-0197549247}}</ref> Historian [[Walter Scheidel]], a specialist in ancient history, posits that [[economic inequality]] and wealth concentration in the top percentile "had been made possible by the transfer of state assets to private owners."<ref>{{cite book |last=Scheidel |first=Walter |author-link=Walter Scheidel |title=The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century |publisher=[[Princeton University Press]] |year=2017 |isbn=978-0691165028 |page=222 |url=https://books.google.com/books?id=NgZpDQAAQBAJ&pg=PA222}}</ref>

In Latin America, on the one hand, according to John Nellis's research for [[Center for Global Development]], economic indicators, including firm profitability, productivity, and growth, project positive [[microeconomic]] results.<ref name="Nellis" /> On the other hand, however, privatisation has been largely met with a negative criticism and citizen coalitions. This [[neoliberal]] criticism highlights the ongoing conflict between varying visions of economic development. [[Karl Polanyi]] emphasizes the societal concerns of self-regulating markets through a concept known as a "double movement". In essence, whenever societies move towards increasingly unrestrained, free-market rule, a natural and inevitable societal correction emerges to undermine the contradictions of capitalism.{{Citation needed|date=October 2020}} This was the case in the [[2000 Cochabamba protests]].{{Citation needed|date=October 2020}}

Privatization in Latin America has invariably experienced increasing push-back from the public. [[Mary Shirley]] from [[The Ronald Coase Institute]] suggests that implementing a less efficient but more politically mindful approach could be more sustainable.<ref>"Why is Sector Reform So Unpopular in Latin America?" by Mary Shirley.  The Ronald Coase Institute Working Paper, 2004, p. 1.</ref>

In India, a survey by the [[National Commission for Protection of Child Rights]] (NCPCR) – Utilization of Free Medical Services by Children Belonging to the Economically Weaker Section (EWS) in Private Hospitals in New Delhi, 2011–12: A Rapid Appraisal – indicates under-utilization of the free beds available for EWS category in private hospitals in Delhi, though they were allotted land at subsidized rates.<ref>{{Cite news |title=Private hospitals shun destitute children |date=August 17, 2013 |url=http://www.thehindu.com/news/cities/Delhi/private-hospitals-shun-destitute-children/article5031905.ece |first=Bindu shajan |last=Perappadan |newspaper=The Hindu |access-date=21 August 2013}}</ref>

In Australia a "People's Inquiry into Privatisation" (2016/17) found that the impact of privatisation on communities was negative.  The report from the inquiry "Taking Back Control" <ref>{{Cite web |url=https://d3n8a8pro7vhmx.cloudfront.net/cpsu/pages/1573/attachments/original/1508714447/Taking_Back_Control_FINAL.pdf?1508714447 |title=Archived copy |access-date=2018-12-03 |archive-date=2020-01-29 |archive-url=https://web.archive.org/web/20200129144432/https://d3n8a8pro7vhmx.cloudfront.net/cpsu/pages/1573/attachments/original/1508714447/Taking_Back_Control_FINAL.pdf?1508714447 |url-status=dead }}</ref>{{full citation needed|date=October 2020}} made a range of recommendations to provide accountability and transparency in the process.  The report highlighted privatisation in healthcare, aged care, child care, social services, government departments, electricity, prisons and vocational education featuring the voices of workers, community members and academics.

Some reports show that the results of privatization are experienced differently between men and women for numerous reasons: when [[public service]]s are privatized women are expected to take on the health and social care of [[Dependant|dependents]],<ref>{{cite web|url=https://world-psi.org/uncsw/wordpress/wp-content/uploads/2019/03/FactSheetCSW63_Privatisation.pdf|title=Privatisation and Women's Human Rights : Factsheet for CSW63 advocacy|website=World-psi.org|accessdate=5 March 2022}}</ref> women have less access to privatized goods,<ref name=":2">{{Cite journal|last=Prizzia|first=Ross|date=Nov 2005|title=An International Perspective of Privatization and Women Workers|url=https://vc.bridgew.edu/cgi/viewcontent.cgi?article=1422&context=jiws|journal=Journal of International Women's Studies|volume=7|pages=54–68}}</ref> [[public sector]] employs a larger proportion of women than does the [[private sector]],<ref>{{cite web|title=Five facts on gender equity in the public sector|url=https://blogs.worldbank.org/governance/five-facts-gender-equity-public-sector|access-date=2021-11-29|website=blogs.worldbank.org|date=27 September 2021 |language=en}}</ref> and the women in the public sector are more likely to be [[unionized]] than those in the private sector.<ref>{{Cite journal|last=Stinson|first=Jane|title=Why Privatization is a Women's Issue|journal=Canadian Women's Studies|volume=23|pages=18–22|citeseerx=10.1.1.925.3111}}</ref> In Chile, women are disproportionately affected by the privatization of the pension system because factors such as "women's longer life expectancy, earlier retirement age, and lower rates of labor-force participation, lower salaries" affect their ability to accumulate funds for retirement which leads to lower pensions.<ref name=":2" /> [[Low income|Low-income]] women face an even greater burden; Anjela Taneja, of [[Oxfam]] India says "The privatization of public services...implies limited or no access to essential services for women living in poverty, who are often the ones more in need of these services."

The increase in privatization since the 1980s has been a factor in rising [[Income inequality in the United States|income]] and [[Wealth inequality in the United States|wealth]] inequality in the United States.<ref>{{cite news |last=Picchi |first=Aimee |date=December 7, 2021 |title=The new Gilded Age: 2,750 people have more wealth than half the planet |url=https://www.cbsnews.com/news/wealth-inequality-billionaires-piketty-report/ |work=[[CBS News]] |location= |access-date=December 9, 2021}}</ref>