The New Right, State Ownership and Privatization: a Critique

Abstract

Privatization is now a key economic policy in a number of countries. Although the arguments surrounding privatization are well rehearsed, its underlying rationale is relatively under-explored. The purpose of this paper is to rectify this by considering the theoretical underpinnings of 'new right' thinking, both from procedural and instrumentalist perspectives. The procedural approach is soon rejected and the paper focuses upon issues relating to the operation of private markets and the relative efficiency of public and private provision, drawing upon recent research in these areas. The paper concludes that insofar as privatization as a policy both in the UK and elsewhere rests upon the arguments reviewed here, it appears to rest upon weak foundations.