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113-398: On signing the bill into law, Reagan stated: "One of the basic policies of my administration is that private enterprise should be as private as possible—guided by the market judgments of business managers rather than by the dictates of government regulators. Enactment of this legislation is a significant milestone in our efforts to deregulate one of our country's most vital economic sectors,

226-435: A "People's Inquiry into Privatisation" (2016/17) found that the impact of privatisation on communities was negative. The report from the inquiry "Taking Back Control" made a range of recommendations to provide accountability and transparency in the process. The report highlighted privatisation in healthcare, aged care, child care, social services, government departments, electricity, prisons and vocational education featuring

339-658: A "one in, one out" approach to new regulations. In 1997, Chancellor Brown announced the "freeing" of the Bank of England to set monetary policy, so the Bank was no longer under direct government control. In 2006, new primary legislation (the Legislative and Regulatory Reform Act 2006 ) was introduced to establish statutory principles and a code of practice and it permits ministers to make Regulatory Reform Orders (RROs) to deal with older laws which they deem to be out of date, obscure or irrelevant. This act has often been criticized and

452-414: A form of a secured loan and are criticized as a "particularly noxious form of governmental debt". In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments—the transaction can be considered substantively the same as a secured loan, though it is structured as

565-608: A law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier." 49 U.S.C.   § 14501 (c)(1) (Supp. V 1999). Ocean transportation was the last to be addressed. This was done in two acts, the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 . These acts were less thoroughgoing than the legislation dealing with U.S. domestic transportation, in that they left in place

678-974: A major industry, transportation, originated in the Richard Nixon Administration and was forwarded to Congress in late 1971. This proposal was initiated and developed by an interagency group that included the Council of Economic Advisors (represented by Hendrik Houthakker and Thomas Gale Moore ), White House Office of Consumer Affairs (represented by Jack Pearce), Department of Justice, Department of Transportation, Department of Labor, and other agencies. The proposal addressed both rail and truck transportation, but not air carriage. (92d Congress, Senate Bill 2842) The developers of this legislation in this Administration sought to cultivate support from commercial buyers of transportation services, consumer organizations , economists, and environmental organization leaders. This 'civil society' coalition became

791-753: A more cautious and nuanced evaluation of privatization" and that "private ownership alone is no longer argued to automatically generate economic gains in developing economies". According to a 2008 study published in Annals of Public and Cooperative Economics , liberalization and privatization have produced mixed results. Although typically there are many costs associated with these efficiency gains, many economists argue that these can be dealt with by appropriate government support through redistribution and perhaps retraining . Yet, some empirical literature suggests that privatization could also have very modest effects on efficiency and quite regressive distributive impact. In

904-486: A natural and inevitable societal correction emerges to undermine the contradictions of capitalism. This was the case in the 2000 Cochabamba protests . Privatization in Latin America has invariably experienced increasing push-back from the public. Mary Shirley from The Ronald Coase Institute suggests that implementing a less efficient but more politically mindful approach could be more sustainable. In India,

1017-543: A portion of the publicly owned generation. The remainder has been at market price and there are numerous competing energy contract providers. However, Ontario is installing Smart Meters in all homes and small businesses and is changing the pricing structure to Time of Use pricing. All small volume consumers were scheduled to shift to the new rate structure by the end of 2012. Alberta has deregulated its electricity provision. Customers are free to choose which company they sign up with, but there are few companies to choose from and

1130-399: A process known as regulatory capture . Industries then use regulation to serve their own interests, at the expense of the consumer. A similar pattern has been seen with the deregulation process itself, often effectively controlled by regulated industries through lobbying. Such political forces, however, exist in many other forms for other lobby groups . Examples of deregulated industries in

1243-502: A programme of deregulation and privatization after the party's victory at the 1979 general election . The Building Act 1984 reduced building regulations from 306 pages to 24, while compulsory competitive tendering required local government to compete with the private sector in delivering services. Other steps included express coach ( Transport Act 1980 ), British Telecom (completed in 1984), privatization of London bus services (1984), local bus services ( Transport Act 1985 ) and

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1356-483: A protestant could show the new authority was contrary to public interest. The bill provided the Interstate Commerce Commission could investigate or suspend rates considered discriminatory or predatory. It could also overrule state regulatory authorities on intrastate "rate and exit issues" if state rulings caused "undue burdens" on interstate commerce. Following the enactment of the new law,

1469-524: A regulatory framework. This included large projects such as building new hospitals for the NHS , building new state schools, and maintaining the London Underground . These were never privatized by public offer, but instead by tendering commercial interests. One problem that encouraged deregulation was the way in which regulated industries often come to control the government regulatory agencies in

1582-556: A sale. This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years. It is argued that this is motivated by "politicians' desires to borrow money surreptitiously", due to legal restrictions on and political resistance to alternative sources of revenue, viz, raising taxes or issuing debt. Privatization had different outcomes around

1695-495: A series of financial crises, including the savings and loan crisis , the Long-Term Capital Management (LTCM) crisis, each of which necessitated major bailouts, and the derivatives scandals of 1994. These warning signs were ignored as financial deregulating continued, even in view of the inadequacy of industry self-regulation as shown by the financial collapses and bailout. The 1998 bailout of LTCM sent

1808-478: A specialist in ancient history, posits that economic inequality and wealth concentration in the top percentile "had been made possible by the transfer of state assets to private owners." In Latin America, on the one hand, according to John Nellis's research for Center for Global Development , economic indicators, including firm profitability, productivity, and growth, project positive microeconomic results. On

1921-625: A stock market with high capital. Voucher privatization occurred mainly in the transition economies in Central and Eastern Europe, such as Russia , Poland , the Czech Republic , and Slovakia . Additionally, privatization from below had made important contribution to economic growth in transition economies. In one study assimilating some of the literature on "privatization" that occurred in Russian and Czech Republic transition economies,

2034-741: A survey by the National Commission for Protection of Child Rights (NCPCR) – Utilization of Free Medical Services by Children Belonging to the Economically Weaker Section (EWS) in Private Hospitals in New Delhi, 2011–12: A Rapid Appraisal – indicates under-utilization of the free beds available for EWS category in private hospitals in Delhi, though they were allotted land at subsidized rates. In Australia

2147-460: A sustainable free market system. Regarding the electricity market, contemporary academic Adam Thierer, "The first step toward creating a free market in electricity is to repeal the federal statutes and regulations that hinder electricity competition and consumer choice ." This viewpoint stretches back centuries. Classical economist Adam Smith argued the benefits of deregulation in his 1776 work, The Wealth of Nations : [Without trade restrictions]

2260-706: A template for coalitions influential in efforts to deregulate trucking and air transport later in the decade. After Nixon left office, the Gerald Ford presidency, with the allied interests, secured passage of the first significant change in regulatory policy in a pro-competitive direction, in the Railroad Revitalization and Regulatory Reform Act of 1976 . President Jimmy Carter – aided by economic adviser Alfred E. Kahn – devoted substantial effort to transportation deregulation, and worked with Congressional and civil society leaders to pass

2373-412: A transition to "effective private sector owners [of former] state assets". Rather than mainly participating in a market economy, these individuals could prefer elevating their personal status or prefer accumulating political power. Instead, outside foreign investment led to the efficient conduct of former state assets in the private sector and market economy. Through privatization by direct asset sale or

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2486-448: Is influenced by the capital market and the political and firm-specific factors. Privatization through the stock market is more likely to be the method used when there is an established capital market capable of absorbing the shares. A market with high liquidity can facilitate the privatization. If the capital markets are insufficiently developed, however, it would be difficult to find enough buyers. The shares may have to be underpriced, and

2599-590: Is more prevalent in non-privatized sectors. Furthermore, according to the World Bank extralegal and unofficial activities are more prevalent in countries that privatized less. Other research suggests that privatization in Russia resulted in a dramatic rise in the level of economic inequality and a collapse in GDP and industrial output. Russian President Boris Yeltsin 's IMF -backed rapid privatization schemes saw half

2712-592: Is of the opinion that deregulation is responsible for increasing price volatility on the commodity market. This particularly affects people and economies in developing countries. More and more homogenization of financial institution which may also be a result of deregulation turns out to be a major concern for small-scale producers in those countries. Privatization Privatization (rendered privatisation in British English ) can mean several different things, most commonly referring to moving something from

2825-524: The 2011 revolution , most of the public began to call for re-nationalization, citing allegations of the privatized firms practicing crony capitalism under the old regime. There are various reasons why a government may decide to privatize; commonly due to economic reasons. The economic factors that influence a government's decision to privatize assume this will lower government debt. Studies have shown that governments are more likely to privatise with higher public debt, typically because governments do not have

2938-653: The Airline Deregulation Act on October 24, 1978 – the first federal government regulatory regime, since the 1930s, to be completely dismantled. Carter also worked with Congress to produce the Staggers Rail Act (signed October 14, 1980), and the Motor Carrier Act of 1980 (signed July 1, 1980). These were the major deregulation acts in transportation that set the general conceptual and legislative framework, which replaced

3051-632: The Brookings Institution and the American Enterprise Institute , were active in holding seminars and publishing studies advocating deregulatory initiatives throughout the 1970s and 1980s. Cornell economist Alfred E. Kahn played a central role in both theorizing and participating in the Carter Administration 's efforts to deregulate transportation. The first comprehensive proposal to deregulate

3164-535: The Conservative government of Margaret Thatcher when many state-run firms were sold off to the private sector. The privatization received very mixed views from the public and the parliament. Even former Conservative prime minister Harold Macmillan was critical of the policy, likening it to "selling the family silver". There were around 3 million shareholders in Britain when Thatcher took office in 1979 , but

3277-458: The District of Columbia have introduced deregulated electricity markets to consumers in some capacity. Additionally, seven states ( Arizona , Arkansas , California , Nevada , New Mexico , Virginia , and Wyoming ) began the process of electricity deregulation in some capacity but have since suspended deregulation efforts. Deregulation was put into effect in the communications industry by

3390-583: The European Commission argues that privatisation in Europe had mixed effects on service quality and has achieved only minor productivity gains, driven mainly by lower labour input combined with other cost cutting strategies that led to a deterioration of employment and working conditions. Meanwhile, a different study by the commission found that the UK rail network (which was privatized from 1994 to 1997)

3503-475: The Interstate Commerce Commission received over 2000 applications to operate new bus services. However, the rate of service loss was not substantially different from that observed prior to passage. Supporters of the Act consider it "beneficial in improving the economic efficiency of carriers", while "some minor reservations" exist "regarding its adverse effects on smaller towns and rural areas". Those most affected by

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3616-785: The National Industrial Recovery Act (which was struck down by the Supreme Court), regulation of trucking, airlines and communications, the Securities Exchange Act of 1934 , and the Glass–Steagall Act of 1933. These regulations stayed largely in place until Richard Nixon 's Administration. In supporting his competition-limiting regulatory initiatives President Roosevelt blamed the excesses of big business for causing an economic bubble . However, historians lack consensus in describing

3729-614: The Revolutions of 1989 introduced non-communist governments. Freedom House's privatization index, 1998 and 2002 Freedom House 's privatization index rated transition countries from 1 (maximum progress) to 7 (no progress). The table below shows the privatization index for various Eastern European countries in 1998 and 2002: The largest public shares offering in France involved France Télécom . Egypt undertook widespread privatization under Hosni Mubarak . Following his overthrow in

3842-634: The Surface Freight Forwarder Deregulation Act of 1986 . As many states continued to regulate the operations of motor carriers within their own state, the intrastate aspect of the trucking and bus industries was addressed in the Federal Aviation Administration Authorization Act of 1994 , which provided that "a State, political subdivision of a State, or political authority of two or more States may not enact or enforce

3955-401: The demutualization of a mutual organization , cooperative , or public-private partnership in order to form a joint-stock company . Separately, privatization can refer to the purchase of all outstanding shares of a publicly traded company by private equity investors, which is more often called "going private" . Before and after this process the company is privately owned, but after

4068-667: The private sector , and the women in the public sector are more likely to be unionized than those in the private sector. In Chile, women are disproportionately affected by the privatization of the pension system because factors such as "women's longer life expectancy, earlier retirement age, and lower rates of labor-force participation, lower salaries" affect their ability to accumulate funds for retirement which leads to lower pensions. Low-income women face an even greater burden; Anjela Taneja, of Oxfam India says "The privatization of public services...implies limited or no access to essential services for women living in poverty, who are often

4181-490: The private sector . Argentina underwent heavy economic deregulation, privatization , and had a fixed exchange rate during the Menem administration (1989–1999). In December 2001, Paul Krugman compared Enron with Argentina, claiming that both were experiencing economic collapse due to excessive deregulation. Two months later, Herbert Inhaber claimed that Krugman confused correlation with causation , and neither collapse

4294-639: The "conference" system in international ocean liner shipping, which historically embodied cartel mechanisms. However, these acts permitted independent rate-making by conference participants, and the 1998 Act permitted secret contract rates, which tend to undercut collective carrier pricing. According to the United States Federal Maritime Commission , in an assessment in 2001, this appears to have opened up substantial competitive activity in ocean shipping, with beneficial economic results. The Emergency Petroleum Allocation Act

4407-629: The American consumer, the creation of a federal income tax (by the Sixteenth Amendment ; the income tax used a progressive tax structure with especially high taxes on the wealthy), the establishment of the Federal Reserve , the institution of shorter working hours , higher wages , better living conditions, better rights and privileges to trade unions, protection of the rights of strikers , banning of unfair labor practices, and

4520-557: The Glass–Steagall Act of 1933, removing barriers in the market that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. Such deregulation of the financial sector in the United States fostered greater risktaking by finance sector firms through the creation of innovative financial instruments and practices, including securitization of loan obligations of various sorts and credit default swaps . This caused

4633-701: The Nazi Party." Great Britain privatized its steel industry in the 1950s, and the West German government embarked on large-scale privatization, including sale of the majority stake in Volkswagen to small investors in public share offerings in 1961. However, it was in the 1980s under Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States that privatization gained worldwide momentum. Notable privatization attempts in

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4746-545: The OECD. As a result, New Zealand, went from having a reputation as an almost socialist country to being considered one of the most business-friendly countries of the world, next to Singapore. However, critics charge that the deregulation has brought little benefit to some sections of society, and has caused much of New Zealand's economy (including almost all of the banks) to become foreign-owned. Russia went through wide-ranging deregulation (and concomitant privatization) efforts in

4859-608: The Russian population fall into destitution in just several years as unemployment climbed to double digits by the early to mid 1990s. A 2009 study published in The Lancet medical journal has found that as many as a million working men died as a result of economic shocks associated with mass privatization in the former Soviet Union and in Eastern Europe during the 1990s, although a further study suggested that there were errors in their method and "correlations reported in

4972-690: The Taoist clergy that a strong ruler was virtually invisible. During the Renaissance , most of Europe was still by and large following the feudal economic model. By contrast, the Ming dynasty in China began once more to practice privatization, especially with regards to their manufacturing industries. This was a reversal of the earlier Song dynasty policies, which had themselves overturned earlier policies in favor of more rigorous state control. In Britain,

5085-406: The UK included privatization of Britoil (1982), the radioactive-chemicals company Amersham International (1982), British Telecom (1984), Sealink ferries (1984), British Petroleum (gradually privatized between 1979 and 1987), British Aerospace (1985 to 1987), British Gas (1986), Rolls-Royce (1987), Rover Group (formerly British Leyland , 1988), British Steel Corporation (1988), and

5198-648: The US. Regulation characteristics of Natural Gas Choice programs vary between the laws of the currently adoptive 21 states (as of 2008). Deregulation of the electricity sector in the U.S. began in 1992. The Energy Policy Act of 1992 eliminated obstacles for wholesale electricity competition, but deregulation has yet to be introduced in all states. As of April 2014, 16 U.S. states ( Connecticut , Delaware , Illinois , Maine , Maryland , Massachusetts , Michigan , Montana , New Hampshire , New Jersey , New York , Ohio , Oregon , Pennsylvania , Rhode Island , and Texas ) and

5311-503: The United States Office of Management and Budget's Office of Information and Regulatory Affairs , and the United Kingdom's Better Regulation Commission . Cost–benefit analysis is frequently used in such reviews. In addition, there have been regulatory innovations, usually suggested by economists, such as emissions trading . Deregulation can be distinguished from privatization , which transfers state-owned businesses to

5424-489: The United States are banking, telecommunications, airlines, and natural resources. During the Progressive Era (1890s–1920), Presidents Theodore Roosevelt , William Howard Taft , and Woodrow Wilson instituted regulation on parts of the American economy, most notably big business and industry. Some prominent reforms were trust-busting (the destruction and banning of monopolies), the creation of laws protecting

5537-612: The assumption that foreign investment would play a major role. In post- reunification East Germany, by the end of June 1992, the Treuhandanstalt had privatized 8,175 companies, with 5,950 left on hand (4,340 remaining to be sold and the remainder to be liquidated). June 1992 was also when the last East German on the board of the Treuhand left. By the end of 1994, Treuhand had sold almost everything, having only 65 firms left to privatize as of December 1994. More than 80% of

5650-445: The authors identified three methods of privatization: "privatization by sale", "mass privatization", and "mixed privatization". Their calculations showed that "mass privatization" was the most effective method. However, in economies "characterized by shortages" and maintained by the state bureaucracy, wealth was accumulated and concentrated by "gray/black market" operators. Privatizing industries by sale to these individuals did not mean

5763-507: The bill were union bus drivers as the deregulation of the industry allowed for new, non-union workers to flood the market and decrease wages across the board, leading in 1983 to the Greyhound Bus Line Strikes which lasted several weeks nationally. Deregulate Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of

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5876-596: The buyout its shares are withdrawn from being traded at a public stock exchange . The term privatizing first appeared in English, with quotation marks, in the New York Times , in April 1923, in a translation of a German speech referring to the potential for German state railroads to be bought by American companies. In German, the word Privatisierung has been used since at least the 19th century. Ultimately,

5989-591: The causal relationship between various events and the role of government economic policy in causing or ameliorating the Depression. Deregulation gained momentum in the 1970s, influenced by research by the Chicago school of economics and the theories of George Stigler , Alfred E. Kahn , and others. The new ideas were widely embraced by both liberals and conservatives. Two leading think tanks in Washington,

6102-570: The consumer price of electricity has increased substantially as it has in all other Canadian provinces.. Consumers may choose to remain with the public utility at the Regulated Rate Option. In 2003, there were amendments to EU directive on software patents . Since 2006, the European Common Aviation Area has given carriers from one EU country the freedom of the air in most others. The taxi industry

6215-784: The context of the privatization of services or government functions, where private entities are tasked with the implementation of government programs or the performance of government services. Gillian E. Metzger has written that: "Private entities [in the US] provide a vast array of social services for the government; administer core aspects of government programs; and perform tasks that appear quintessentially governmental, such as promulgating standards or regulating third-party activities." Metzger mentions an expansion of privatization that includes health and welfare programs, public education, and prisons. The history of privatization dates from Ancient Greece , when governments contracted out almost everything to

6328-512: The cost of bureaucracy was one of the reasons for the fall of the Roman Empire . Perhaps one of the first ideological movements towards privatization came during China 's golden age of the Han dynasty . Taoism came into prominence for the first time at a state level, and it advocated the laissez-faire principle of Wu wei (無為), literally meaning "do nothing". The rulers were counseled by

6441-714: The countries suggest that a large segment of the public is dissatisfied with or have negative views of privatization in the region. In the 1990s, the governments in Eastern and Central Europe engaged in extensive privatization of state-owned enterprises in Eastern and Central Europe and Russia, with assistance from the World Bank , the U.S. Agency for International Development, the German Treuhand , and other governmental and non-governmental organization . Nippon Telegraph and Telephone 's privatization in 1987 involved

6554-631: The delivery of more social services to the working classes and social safety nets to many unemployed workers, thus helping to create a welfare state . During the Presidencies of Warren Harding (1921–23) and Calvin Coolidge (1923–29), the federal government generally pursued laissez-faire economic policies. After the onset of the Great Depression , President Franklin D. Roosevelt implemented many economic regulations, including

6667-660: The economy . It became common in advanced industrial economies in the 1970s and 1980s, as a result of new trends in economic thinking about the inefficiencies of government regulation, and the risk that regulatory agencies would be controlled by the regulated industry to its benefit, and thereby hurt consumers and the wider economy. Economic regulations were promoted during the Gilded Age , in which progressive reforms were claimed as necessary to limit externalities like corporate abuse, unsafe child labor , monopolization , and pollution , and to mitigate boom and bust cycles. Around

6780-411: The exchange rate; establishing an independent reserve bank; performance contracts for senior civil servants; public sector finance reform based on accrual accounting; tax neutrality; subsidy-free agriculture; and industry-neutral competition regulation. Economic growth was resumed in 1991. New Zealand was changed from a somewhat closed and centrally controlled economy to one of the most open economies in

6893-490: The expression "Bolsonomics" was created), such as Economic Freedom Law, Natural Gas Law, Basic Sanitation Legal Framework, besides allowing the direct sale of ethanol by fuel stations and opening rail transport industry to private investment. and deregulating the use of foreign currency. Natural gas is deregulated in most of the country, with the exception of some Atlantic provinces and some pockets like Vancouver Island and Medicine Hat. Most of this deregulation happened in

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7006-776: The first attempt at a social welfare analysis of the British privatization program under the Conservative governments of Margaret Thatcher and John Major during the 1980s and 1990s, Massimo Florio points to the absence of any productivity shock resulting strictly from ownership change. Instead, the impact on the previously nationalized companies of the UK productivity leap under the Conservatives varied in different industries. In some cases, it occurred prior to privatization, and in other cases, it occurred upon privatization or several years afterward. A 2012 study published by

7119-551: The government at the start of the Multi-Channel Transition era. This deregulation put into place a division of labor between the studios and the networks. Communications in the United States (and internationally) are areas in which both technology and regulatory policy have been in flux. The rapid development of computer and communications technology – particularly the Internet ;– have increased

7232-546: The interest of the society. Scholars who theorize that deregulation is beneficial to society often cite what is known as the Iron Law of Regulation, which states that all regulation eventually leads to a net loss in social welfare. Critics of economic liberalization and deregulation cite the benefits of regulation, and believe that certain regulations do not distort markets and allow companies to continue to be competitive , or according to some, grow in competition. Much as

7345-483: The largest share offering in financial history at the time. 15 of the world's 20 largest public share offerings have been privatizations of telecoms. In 1988, the perestroika policy of Mikhail Gorbachev started allowing privatization of the centrally planned economy. Large privatization of the Soviet economy occurred over the next few years as the country dissolved . Other Eastern Bloc countries followed suit after

7458-489: The late 1970s, such reforms were deemed burdensome on economic growth and many politicians espousing neoliberalism started promoting deregulation. The stated rationale for deregulation is often that fewer and simpler regulations will lead to raised levels of competitiveness, therefore higher productivity , more efficiency and lower prices overall. Opposition to deregulation may involve apprehension regarding environmental pollution and environmental quality standards (such as

7571-441: The late 1990s under Boris Yeltsin , now partially reversed under Vladimir Putin . The main thrust of deregulation has been the electricity sector (see RAO UES ), with railroads and communal utilities tied in second place. Deregulation of the natural gas sector ( Gazprom ) is one of the more frequent demands placed upon Russia by the United States and European Union. The Conservative government led by Margaret Thatcher started

7684-773: The losses when the fraudulent Ponzi schemes finally collapsed and were exposed. After the collapse, regulators in the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) were finally allowed to file thousands of criminal complaints that led to over a thousand felony convictions of key Savings and Loan insiders. By contrast, between 2007 and 2010, the OCC and OTS combined made zero criminal referrals; Black concluded that elite financial fraud has effectively been decriminalized. Economist Jayati Ghosh

7797-416: The mid-1980s. Comparison shopping websites operate in some of these jurisdictions, particularly Ontario, Alberta and British Columbia. The other provinces are small markets and have not attracted suppliers. Customers have the choice of purchasing from a local distribution company (LDC) or a deregulated supplier. In most provinces the LDC is not allowed to offer a term contract, just a variable price based on

7910-543: The mid-90s John Howard 's Liberal Party began deregulation of the labor market with the Workplace Relations Act 1996 , going much further in 2005 through its WorkChoices policy. However, this was reversed under the following Rudd Labor government . After Dilma's impeachment , Michel Temer introduced a labor reform , besides allowing up to 100% of foreign capital on Brazilian air companies and giving more protection to state-owned enterprises from political pressure. Bolsonaro administration also promoted deregulations (even

8023-400: The middle of the 1930s. The firms belonged to a wide range of sectors: steel, mining, banking, local public utilities, shipyard, ship-lines, railways, etc. In addition to this, delivery of some public services produced by public administrations prior to the 1930s, especially social services and services related to work, was transferred to the private sector, mainly to several organizations within

8136-467: The more competitive the industry, the greater the improvement in output, profitability, and efficiency. Such efficiency gains mean a one-off increase in GDP , but through improved incentives to innovate and reduce costs also tend to raise the rate of economic growth . More recent research and literature review performed by Professor Saul Estrin and Adeline Pelletier concluded that "the literature now reflects

8249-408: The needed time to wait for a return. Another economic factor that influences this area is the resulting efficiency of SOEs once privatised. Commonly, governments aren’t able to provide the required investments required to ensure profitability for various reasons. These factors may lead to a government deciding to privatize. There are several main methods of privatization: The choice of sale method

8362-405: The obvious and simple system of natural liberty establishes itself of its own accord. Every man...is left perfectly free to pursue his own interest in his own way.... The sovereign is completely discharged from a duty [for which] no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to

8475-446: The ones more in need of these services." The increase in privatization since the 1980s has been a factor in rising income and wealth inequality in the United States. Due to low levels of native capital accumulation in the former Central and Eastern Europe, the rapid privatization preferred by international institutions ( EBRD , IMF , World Bank ) and other foreign banks was a de facto call for international bidding, reflecting

8588-689: The original article are simply not robust." A subsequent body of scholarship, while still controversial, demonstrates that rapid privatization schemes associated with neoliberal economic reforms did result in poorer health outcomes in former Eastern Bloc countries during the transition to markets economies, with the World Health Organization contributing to the debate by stating "IMF economic reform programs are associated with significantly worsened tuberculosis incidence, prevalence, and mortality rates in post-communist Eastern European and former Soviet countries." Historian Walter Scheidel ,

8701-430: The other hand, however, privatisation has been largely met with a negative criticism and citizen coalitions. This neoliberal criticism highlights the ongoing conflict between varying visions of economic development. Karl Polanyi emphasizes the societal concerns of self-regulating markets through a concept known as a "double movement". In essence, whenever societies move towards increasingly unrestrained, free-market rule,

8814-599: The other hand, there exists substantial concern about concentration of media ownership resulting from relaxation of historic controls on media ownership designed to safeguard diversity of viewpoint and open discussion in the society, and about what some perceive as high prices in cable company offerings at this point. The financial sector in the U.S. has been considerably deregulated in recent decades, which has allowed for greater financial risktaking . The financial sector used its considerable political sway in Congress and in

8927-523: The political establishment and influenced the ideology of political institutions to press for more and more deregulation. Among the most important of the regulatory changes was the Depository Institutions Deregulation and Monetary Control Act of 1980, which repealed the parts of the Glass–Steagall Act regarding interest rate regulation via retail banking. The Financial Services Modernization Act of 1999 repealed part of

9040-611: The private sector. In the Roman Republic private individuals and companies performed the majority of services including tax collection ( tax farming ), army supplies ( military contractors ), religious sacrifices and construction. However, the Roman Empire also created state-owned enterprises —for example, much of the grain was eventually produced on estates owned by the Emperor. David Parker and David S. Saal suggest that

9153-408: The private sector. In the 1990s, privatization revenue from 18 Latin American countries totaled 6% of gross domestic product. Private investment in infrastructure from 1990 and 2001 reached $ 360.5 billion, $ 150 billion more than in the next emerging economy. While economists generally give favorable evaluations of the impact of privatization in Latin America, opinion polls and public protests across

9266-887: The privatization of common lands is referred to as enclosure (in Scotland as the Lowland Clearances and the Highland Clearances ). Significant privatizations of this nature occurred from 1760 to 1820, preceding the Industrial Revolution in that country. The first mass privatization of state property occurred in Nazi Germany between 1933 and 1937: "It is a fact that the government of the National Socialist Party sold off public ownership in several state-owned firms in

9379-575: The privatized businesses were bought by foreigners (chiefly West Germans – 75%). Romania's first privatization took place on 3 August 1992. There was "very little" privatization during 1992: only 22 state-owned enterprises were privatized. The pace picked up throughout the following year, with more than 260 companies privatized. Four of the 22 enterprises privatized in 1992 were sold to foreign investors. In 1993, 265 companies were privatized, followed by 604 in 1994. Two companies were sold to foreign investors during this period, one each in 1993 and 1994. At

9492-536: The promise of rolling back environmental regulations. His devotion to the economic beliefs of Milton Friedman led him to promote the deregulation of finance, agriculture, and transportation. A series of substantial enactments were needed to work out the process of encouraging competition in transportation. Interstate buses were addressed in 1982, in the Bus Regulatory Reform Act of 1982. Freight forwarders (freight aggregators) got more freedoms in

9605-448: The public sector into the private sector. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated. Government functions and services may also be privatised (which may also be known as "franchising" or "out-sourcing"); in this case, private entities are tasked with the implementation of government programs or performance of government services that had previously been

9718-465: The purview of state-run agencies. Some examples include revenue collection, law enforcement , water supply , and prison management . Another definition is that privatization is the sale of a state-owned enterprise or municipally owned corporation to private investors; in this case shares may be traded in the public market for the first time, or for the first time since an enterprise's previous nationalization . This type of privatization can include

9831-470: The railways ( Railways Act 1993 ). The feature of all those privatizations was that their shares were offered to the general public. This continued under Thatcher's successor John Major . From 1997 to 2010, the Labour governments of Tony Blair and Gordon Brown developed a programme called " better regulation ". This required government departments to review, simplify or abolish existing regulations, and

9944-428: The regional water authorities (mostly in 1989). After 1979, council house tenants in the UK were given the right to buy their homes (at a heavily discounted rate). One million purchased their residences by 1986. Such efforts culminated in 1993 when British Rail was privatized under Thatcher's successor, John Major . British Rail had been formed by prior nationalization of private rail companies. The privatization

10057-521: The regulatory systems put in place between the 1880s and the 1930s. The dominant common theme of these Acts was to lessen barriers to entry in transport markets and promote more independent, competitive pricing among transport service providers, substituting the freed-up competitive market forces for detailed regulatory control of entry, exit, and price making in transport markets. Thus deregulation arose, though regulations to promote competition were put in place. U.S. President Ronald Reagan campaigned on

10170-463: The reliability of the electricity supply." William K. Black says that inappropriate deregulation helped create a criminogenic environment in the savings and loan industry , which attracted opportunistic control frauds like Charles Keating , whose massive political campaign contributions were used successfully to further remove regulatory oversight. The combination substantially delayed effective governmental action, thereby substantially increasing

10283-504: The removal of regulations on hazardous materials), financial uncertainty, and constraining monopolies . Regulatory reform is a parallel development alongside deregulation. Regulatory reform refers to organized and ongoing programs to review regulations with a view to minimizing, simplifying, and making them more cost effective. Such efforts, given impetus by the Regulatory Flexibility Act of 1980, are embodied in

10396-425: The sale of the state-owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have widely reported the grand corruption that accompanied those sales, according to research released by the World Bank there has been increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption

10509-504: The sales may not raise as much capital as would be justified by the fair value of the company being privatized. Many governments, therefore, elect for listings in more sophisticated markets, for example, Euronext , and the London , New York and Hong Kong stock exchanges. Governments in developing countries and transition countries more often resort to direct asset sales to a few investors, partly because those countries do not yet have

10622-416: The signal to large " too-big-to-fail " financial firms that they would not have to suffer the consequences of the great risks they take. Thus, the greater risktaking allowed by deregulation and encouraged by the bailout paved the way for the financial crisis of 2007–08 . The deregulation movement of the late 20th century had substantial economic effects and engendered substantial controversy. The movement

10735-538: The size and variety of communications offerings. Wireless, traditional landline telephone, and cable companies increasingly invade each other's traditional markets and compete across a broad spectrum of activities. The Federal Communications Commission and Congress appear to be attempting to facilitate this evolution. In mainstream economic thinking, development of this competition would militate against detailed regulatory control of prices and service offerings, and hence favor deregulation of prices and entry into markets. On

10848-414: The spot market. LDC prices are changed either monthly or quarterly. Ontario began deregulation of electricity supply in 2002, but pulled back temporarily due to voter and consumer backlash at the resulting price volatility. The government is still searching for a stable working regulatory framework. The current status is a partially regulated structure in which consumers have received a capped price for

10961-496: The state plays an important role through issues such as property rights , appropriate regulation is argued by some to be "crucial to realise the benefits of service liberalisation". Critics of deregulation often cite the need of regulation in order to: Sharon Beder, a writer with PR Watch, wrote "Electricity deregulation was supposed to bring cheaper electricity prices and more choice of suppliers to householders. Instead it has brought wildly volatile wholesale prices and undermined

11074-411: The stock market, bidders compete to offer higher prices, generating more revenue for the state. Voucher privatization, on the other hand, could represent a genuine transfer of assets to the general population, creating a sense of participation and inclusion. A market could be created if the government permits transfer of vouchers among voucher holders. Some privatization transactions can be interpreted as

11187-434: The subsequent sale of state-run firms saw the number of shareholders double by 1985. By the time of her resignation in 1990, there were more than 10 million shareholders in Britain. Privatization in Latin America was extensive in the 1980s and 1990s, as a result of a Western liberal economic policy. Companies providing public services such as water management , transportation, and telecommunications were rapidly sold off to

11300-424: The surface transportation industry." Ronald Reagan, Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/index.php?pid=43014 The bill included reducing restrictions on bus lines to add or remove stops, and increasing ease of entry of entrepreneurs into the bus service market. As such, authority could be granted to any "fit, willing, and able" carrier unless

11413-402: The voices of workers, community members and academics. Some reports show that the results of privatization are experienced differently between men and women for numerous reasons: when public services are privatized women are expected to take on the health and social care of dependents , women have less access to privatized goods, public sector employs a larger proportion of women than does

11526-524: The word came to German through French from the Latin privatus . The term reprivatization , again translated directly from German ( Reprivatisierung ), was used frequently in the mid-1930s as The Economist reported on Nazi Germany's sale of nationalized banks back to public shareholders following the 1931 economic crisis. The word became common in the late 1970s and early 1980s as part of UK prime minister Margaret Thatcher's economic policies . She

11639-556: The world. Results of privatization may vary depending on the privatization model employed. According to Irwin Stelzer , "it is somewhere between difficult and impossible to separate the effects of privatisation from the effects of such things as trends in the economy". According to research performed by the World Bank and William L. Megginson in the early 2000s, privatization in competitive industries with well-informed consumers, consistently improved efficiency. According to APEC ,

11752-701: Was a regulating law, consisting of a mix of regulations and deregulation, which passed in response to OPEC price hikes and domestic price controls which affected the 1973 oil crisis in the United States. After adoption of this federal legislation, numerous state legislation known as Natural Gas Choice programs have sprung up in several states, as well as the District of Columbia. Natural Gas Choice programs allow residential and small volume natural gas users to compare purchases from natural gas suppliers with traditional utility companies. There are currently hundreds of federally unregulated natural gas suppliers operating in

11865-481: Was always private, but heavily regulated, which becomes less regulated through a process of deregulation . The term may also be used descriptively for something that has always been private, but could be public in other jurisdictions. There are also private entities that may perform public functions. These entities could also be described as privatized. Privatization may mean the government sells state-owned businesses to private interests, but it may also be discussed in

11978-462: Was based on intellectual perspectives which prescribed substantial scope for market forces, and opposing perspectives have been in play in national and international discourse. The movement toward greater reliance on market forces has been closely related to the growth of economic and institutional globalization between about 1950 and 2010. Many economists have concluded that a trend towards deregulation will increase economic welfare long-term and

12091-410: Was controversial, and its impact is still debated today , as doubling of passenger numbers and investment was balanced by an increase in rail subsidy . This has been reverted by the same party in Britain in the early 2020s with the state-owned Great British Railways . The United Kingdom's largest public share offerings were privatizations of British Telecom and British Gas during the 1980s under

12204-513: Was deregulated in Ireland in 2000, and the price of a license dropped overnight to €5,000. The number of taxis increased dramatically. However, some existing taxi drivers were unhappy with the change, as they had invested up to €100,000 to purchase licenses from existing holders, and regarded them as assets. In October 2013 they brought a test case in the High Court for damages. Their claim

12317-463: Was described in Parliament by Lord (Patrick) Jenkin as the "Abolition of Parliament Act". New Labour privatized only a few services, such as Qinetiq . But a great deal of infrastructure and maintenance work previously carried out by government departments was contracted out (outsourced) to private enterprise under the public–private partnership , with competitive bidding for contracts within

12430-611: Was dismissed two years later. New Zealand Governments adopted policies of extensive deregulation from 1984 to 1995. Originally initiated by the Fourth Labour Government of New Zealand , the policies of deregulation were later continued by the Fourth National Government of New Zealand . The policies had the goal of liberalizing the economy and were notable for their very comprehensive coverage and innovations. Specific policies included: floating

12543-505: Was drawing on the work of the pro-privatization Member of Parliament David Howell , who was himself drawing on the Austrian-American management expert Peter Drucker 's 1969 book, The Age of Discontinuity . The word privatization may mean different things depending on the context in which it is used. It can mean moving something from the public sphere into the private sphere, but it may also be used to describe something that

12656-546: Was due to excessive deregulation. Having announced a wide range of deregulatory policies, Labor Prime Minister Bob Hawke announced the policy of "Minimum Effective Regulation" in 1986. This introduced now-familiar requirements for "regulatory impact statements", but compliance by governmental agencies took many years. The labor market under the Hawke/Keating governments operated under the Prices and Incomes Accord . In

12769-609: Was most improved out of all the 27 EU nations from 1997 to 2012. The report examined a range of 14 different factors and the UK came top in four of the factors, second and third in another two and fourth in three, coming top overall. Nonetheless, the impact of the privatisation of British Rail has been the subject of much debate, with the stated benefits including improved customer service, and more investment; and stated drawbacks including higher fares, lower punctuality and increased rail subsidies. Privatizations in Russia and Latin America were accompanied by large-scale corruption during

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