Privatization is not a new phenomenon and has been affecting governments both positively and negatively for many years. Privatization is the process in which a government will sell a state owned enterprise and assets to be privately owned and operated. “The United Kingdom, under the Thatcher government, ushered in the era of privatization in the early 1980s.” (pg3) “The focus on privatization is rooted in the ideological belief that competitive markets are the most efficient actors capable of distributing resources and producing goods.” The sale of assets in the first decade of privatization generated more than £15 billion of revenue for the government. (pg3) “Following the perceived success of the British program, many other countries began privatization initiatives beginning in the late 1980s, and many are still ongoing. “ (pg3) “Canada carried out a number of privatization initiatives between 1983 and 1997. During this period 31 complete or partial privatizations of federal Crown corporations or mixed-ownership enterprises occurred.” (pg3) some of these have been successful, while most have not seen positive results from transferring over the SOE to the private sector.
The most straightforward theoretical support for privatization comes in the form of the neoliberal theory. The advocates of less government intervention into the affairs of the economy and development no doubt support privatized, free-market enterprises. Neoliberals believe that the only kind of market failure that should be corrected by the state is the provision of pure public goods such as national defense and tax collection (pg 27) Any public good that can be provided by the market, they argue should be provided by it. (pg 27) “This philosophy emerged as a critique of the welfare state which had become the most prominent form democratic countries took.” Neo-conservatives/ liberals believe that even if the state turned out to be more efficient than the market in certain instances, many neo-conservatives would still reject state intervention in the market on the grounds that this would erode individual freedom (32) P3’s are entered upon mainly due to budgetary implications as well as risks associated with entering into pure public services. Proponents suggest that P3’s provide us with new efficiencies and reduced costs when entering into a contract agreement (27)
Opponents suggest the rationale of transferring risk is not a sufficient condition to become involved in a P3, and they underline that while P3s are often justified as a means of saving money, this does not necessarily happen. the criticisms of P3s: high cost and less value, lower-quality design, less accountability, loss of worker rights, and loss of public policy flexibility. Without profit, private operators, or financiers, aren’t interested in public service for its own sake.
Over the years Canada has seen a number of problems with regards to the privatization of governmental services. When it comes...