Privatisation

This paper examines the economic policy which came to be known as ‘privatisation’ – the transfer of responsibility for an industry or the ownership of a company from the public to the private sector.

From the 1980s until the mid-1990s, privatisation was an important component of economic policy. Privatisation continued after 1997, although there have only been a handful of instances since then and they have often been referred to by other names. After 2010, interest in the policy as an economic tool revived, particularly with the privatisation of Royal Mail.

After defining ‘privatisation’, this paper presents a brief history of the policy. An analysis of the motivations behind the policy is followed by a discussion of the different methods of privatisation, including public flotations, management-led buyouts and private sales.

We discuss the importance of regulation and competition in privatised industries and present data showing the scale of privatisation in each year since 1970. Finally, we review various strategies for assessing privatisation as a policy and present a chronological table showing each major privatisation by year.

The annex to this paper is a collection of short articles which describe the main features of each major privatisation, including the type of sale, the proceeds to government, and other details