Limits To Privatization. How To Avoid Too Much Of A Good Thing
von Weizsäcker, Ernst Ulrich / Young, Oran R. / Finger, Matthias (Eds.) with Beisheim, Marianne – 2005
Globalization has become a mega-trend, with liberalization and privatization at the heart of it. All over the world, governments have been privatizing services in a growing number of sectors - not just industrial utilities such as energy, water and transport, but also health, education, media, pensions, even prisons and defence. Looking back, it is clear these trends have much earlier roots. Since World War II, international bodies such as GATT, the OECD and the European Union have had liberalization agendas and have facilitated privatization. However, with the emergence of 'turbo-capitalism' and the 'global casino' in the 1990s, a widespread and growing reaction has set in, reflecting the belief that the trends have gone too far. Protests against the WTO in Seattle and the G8 in Genoa as well as the creation of the World Social Forum in Porto Alegre are among the strongest expressions of this, and many now see globalization as jeopardizing the basis of democracy and of equity in international relations. And what have been the results? Have private funds and management produced greater efficiency, better economic performance and higher levels of service, or has the growing strength of the private sector eroded public goods such as health, environmental sustainability and democratic accountability? Limits to Privatization is the first thorough audit of privatizations from around the world. It outlines the historical emergence of globalization and liberalization, and from analyses of over 50 case studies of best- and worst-case experiences of privatization, it provides guidance for policy and action that will restore and maintain the right balance between the powers and responsibilities of the state, the private sector and the increasingly important role of civil society. The result is a book of major importance that challenges one of the orthodoxies of our day and provides a benchmark for future debate. Micro-Conclusions: The lessons learned can in caricature brevity be summarized as: - Develop good governance, strong regulations and regulatory institutions. - Do not privatize what the public sector can still do. - Never privatize for ideological reasons. Secure democratic control over regulatory institutions, and enable the state to reverse privatization in cases of severe failure. - Develop the third sector between the state and the private sector: foundations, charities, civil society.