Introduction
Governments around the world, have, at different time, tried both nationalization and privatization of industry in an effort to spur economic growth and economic development. Nationalization, the seizing of privately owned business by the government, with or without compensation to the owners, is often controversial and has a spotty success record. Privatization, the selling of government owned. And run business to private owners, likewise is often controversial and does not always achieve the intended outcomes of government.
What is nationalization and privatization
Nationalization is the act of where the governments take over an industry or assets into the public ownership of the government. Usually they take from private assets or assets owned by lower levels of government. Nationalization could happen with or without the owner’s permission or compensation. If the government just seized some property without giving any compensation to the owners it is a case of expropriatation. Nationalization can also occur illegally, for example, there was this time when French, seized the car company Renault because they have been working together with the Nazis. Expropriation usually result in many controversial, because there is no compensation whatsoever to the former owners. As a result many businesses hate it when expropriation occurred.
Privatization is basically the opposite of nationalization. Privatization is the act where the government actually transfers the ownership of certain industry or assets from the government to private sector (business). The term can also mean and be used when governments subcontracting a service or a function to a private firm. The term can also be used in a situation where a public company being privatized by the owners. There are three types of privatization; share issue privatization, asset sale privatization and voucher privatization. The most common one is share issue privatization which is selling shares on the...