Privatisation And Marketisation

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The effect of marketisation on the capacity of the UK government: A critical review of the West Coast Main Line deal. This paper analyses the causal reasons behind major policy changes from a public choice theory approach, and in a wider context, the dynamics of governance, therefore providing a model that explains a state’s capacity to provide governance in the face of the privatisation of public services. The primary goal of this paper, therefore, is to set a better understanding of the relationship between marketisation and state capacity. I argue that private enterprises are legitimate operators of public services and such delivery by the private or charitable sector does not “hollow out” the state. I highlight how the state’s financial…show more content…
It is a comprehensive strategy for permanently restructuring the welfare state and public services in the interests of capital” (Whitfield, 1983). Economists have sought to analyse privatisation using theories of market failure, public choice, property rights and the principal-agent approach. However, a theory of privatisation cannot be limited by economic theory alone because it has equally important political and social dimensions. Similarly, a focus on privatisation to the exclusion of marketisation is inadequate. Privatisation and marketisation are inseparable, the latter creating the economic and ideological conditions and social relations by which further privatisation is developed. The current wave of privatisation may have started with the sale of property, as seen with council housing during the early 1980s in Britain, and state-owned corporations, such as British Telecom and British Gas, but it is now embedded in the modernisation and transformation of all public services in Great Britain. Ultimately, privatisation and marketisation must be assessed as part of the theory of the state. Privatisation occurs when one or more of five elements of public services or assets change: 1) ownership of public assets are sold or transferred to the private or voluntary sector; 2) governance and accountability of public bodies is reduced or diluted by new organisational structures such as the use of company and trust models; 3) finance and investment such as the use of private capital or the introduction of new/increased user charges. 4) operating principles and values are changed to reflect private and commercial interests – this ranges from planning for social needs to the provision of services; 5) management of public organisations is restructured and commercialised as a means of implementing the above changes. At the same time, some privatisations embrace more than one

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