Public Service - Privatization

Privatization

There are several ways to privatise public services. A free-market corporation may be established and sold to private investors, relinquishing government control altogether. This essentially ends the public service and makes it a private service. Another option, used in the Nordic countries, is to establish a corporation, but keep ownership or voting power essentially in the hands of the government. For example, the Finnish state owned 49% of Kemira, the rest being owned by private investors. A 49% share doesn't make it a "government enterprise", but it means that all other investors together would have to oppose the state's opinion in order to overturn the state's decisions in the shareholder's meeting. Regulated corporation can also acquire permits on the agreement that they fulfill certain public service duties. When a private corporation runs a natural monopoly, then the corporation is typically heavily regulated, to prevent abuse of monopoly power. Lastly, the government can buy the service on the free market. In many countries, medication is provided in this manner: the government reimburses part of the price of the medication. Also, bus traffic, electricity, healthcare and waste management are privatized in this way. One recent innovation, used in the UK increasingly as well as Australia and Canada is public-private partnerships. This involves giving a long lease to private consortia in return for partly funding infrastructure.