Privatization can mean several different things, most commonly referring to moving something from 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 ; in this case, private entities are tasked with the implementation of government programs or performance of government services that had previously been the purview of state-run agencies. Some examples include revenue collection, law enforcement, water supply, and prison management.
Business is the practice of making one's living or making money by producing or buying and selling products. It is also "any activity or enterprise entered into for profit."
A state-owned enterprise (SOE) is a government entity which is established or nationalised by the national government or provincial government, by an executive order or an act of legislation, in order to earn profit for the government, control monopoly of the private sector entities, provide products & services to citizens at a lower price, implementation of government schemes and to deliver products & services to the remote locations of the country. The national government or provincial government has majority ownership over these state owned enterprises. These state owned enterprises are also known as public sector undertakings in some countries. Defining characteristics of SOEs are their distinct legal form and possession of financial goals & developmental objectives, SOEs are government entities established to pursue financial objectives and developmental goals.
Corporate governance are mechanisms, processes and relations by which corporations are controlled and operated ("governed").
Public finance is the study of the role of the government in the economy. It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. The purview of public finance is considered to be threefold, consisting of governmental effects on:
- The efficient allocation of available resources;
- The distribution of income among citizens; and
- The stability of the economy.
The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, infrastructure, public transit, public education, along with health care and those working for the government itself, such as elected officials. The public sector might provide services that a non-payer cannot be excluded from, services which benefit all of society rather than just the individual who uses the service. Public enterprises, or state-owned enterprises, are self-financing commercial enterprises that are under public ownership which provide various private goods and services for sale and usually operate on a commercial basis.
State ownership, also called government ownership and public ownership, is the ownership of an industry, asset, or enterprise by the state or a public body representing a community, as opposed to an individual or private party. Public ownership specifically refers to industries selling goods and services to consumers and differs from public goods and government services financed out of a government's general budget. Public ownership can take place at the national, regional, local, or municipal levels of government; or can refer to non-governmental public ownership vested in autonomous public enterprises. Public ownership is one of the three major forms of property ownership, differentiated from private, collective/cooperative, and common ownership.
The socialist market economy (SME) is the economic system and model of economic development employed in the People's Republic of China. The system is a market economy with the predominance of public ownership and state-owned enterprises. The term "socialist market economy" was introduced by Jiang Zemin during the 14th National Congress of the Chinese Communist Party (CCP) in 1992 to describe the goal of China's economic reforms. Originating in the Chinese economic reforms initiated in 1978 that integrated China into the global market economy, the socialist market economy represents a preliminary or "primary stage" of developing socialism. Some commentators describe the system as a form of "state capitalism", while others describe it as an original evolution of Marxism, in line with Marxism–Leninism similar to the "New Economic Policy" of the Soviet Union, adapted to the cohabitation with a globalized capitalist system.
Nationalization is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to private assets or to assets owned by lower levels of government being transferred to the state. Nationalization contrasts with privatization and with demutualization. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone renationalization. Industries often subject to nationalization include the commanding heights of the economy – telecommunications, electric power, fossil fuels, railways, airlines, iron ore, media, postal services, banks, and water – though, in many jurisdictions, many such entities have no history of private ownership.
A privately held company is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets but rather the company's stock is offered, owned, traded, exchanged privately, or over-the-counter. In the case of a closed corporation, there are relatively few shareholders or company members. Related terms are unquoted company and unlisted company.
Municipal services or city services refer to basic services that residents of a city expect to the city government to provide in exchange for the taxes which citizens pay. Basic city services may include sanitation, water, streets, the public library, schools, food inspection, fire department, police, ambulance, and other health department issues and transportation. City governments often operate or contract for additional utilities like electricity, gas and cable television. Mumbai even provides a lighthouse service.
A municipal corporation is the legal term for a local governing body, including cities, counties, towns, townships, charter townships, villages, and boroughs. The term can also be used to describe municipally owned corporations.
A hybrid organization is an organization that mixes elements, value systems and action logics of various sectors of society, i.e. the public sector, the private sector and the voluntary sector. A more general notion of hybridity can be found in Hybrid institutions and governance.
Privatization is the process of transferring ownership of a business, enterprise, agency, charity or public service from the public sector or common use to the private sector or to private non-profit organizations. In a broader sense, privatization refers to transfer of any government function to the private sector - including governmental functions like revenue collection and law enforcement.
Inter-municipal cooperation (IMC) is a generic term for all joint provision of public services between municipalities, who are normally but not necessarily neighbours.
Social ownership is the appropriation of the surplus product, produced by the means of production, or the wealth that comes from it, to society as a whole. It is the defining characteristic of a socialist economic system. It can take the form of community ownership, state ownership, common ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Traditionally, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned and integrated by a single entity or network of entities representing society; but the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy. Social ownership of the means of production is the common defining characteristic of all the various forms of socialism.
Russian government ownership of various companies and organizations, collectively known as state-owned enterprises (SOEs), still play an important role in the national economy. The approximately 4,100 enterprises that have some degree of state ownership accounted for 39% of all employment in 2007. In 2007, SOEs controlled 64% of the banking sector, 47% of the oil and gas sector, and 37% of the utility sector.
A municipally owned corporation is a corporation owned by a municipality. They are typically "organisations with independent corporate status, managed by an executive board appointed primarily by local government officials, and with majority public ownership." Some municipally owned corporations rely on revenue from user fees, distinguishing them from agencies and special districts funded through taxation. Municipally owned corporations may also differ from local bureaucracies in funding, transaction costs, financial scrutiny, labour rights, permission to operate outside their jurisdiction, and, under some circumstances, in rights to make profits and risk of bankruptcy.
Local service delivery is the delivery of public services at the local level and is a distinct domain of public policy. Local governments can be more reflective of local needs and interests and a prime driver of innovation in government practices; at the same time, local service delivery deals with some challenges, such as expertise concerns, steering problems, and the presence of economies of scale. Local service delivery is a key topic of discussion for academics and practitioners in the wake of the decentralization and corporatization that occurred under New Public Management and in the wake of local austerity following the 2008 Financial crisis.
The multiple principal problem, also known as the common agency problem, the multiple accountabilities problem, or the problem of serving two masters, is an extension of the principal-agent problem that explains problems that can occur when one person or entity acts on behalf of multiple other persons or entities. Specifically, the multiple principal problem states that when one person or entity is able to make decisions and / or take actions on behalf of, or that impact, multiple other entities: the "principals", the existence of asymmetric information and self-interest and moral hazard among the parties can cause the agent's behavior to differ substantially from what is in the joint principals' interest, bringing large inefficiencies. The multiple principal problem has been used to explain inefficiency in many types of cooperation, particularly in the public sector, including in parliaments, ministries, agencies, inter-municipal cooperation, and public-private partnerships, although the multiple principal problem also occurs in firms with multiple shareholders.
