San Antonio Business Daily

What are the benefits of privatization in developing countries?

How does it improve economic growth of a country. Why it is more advantageous to apply privatization in developing countries rather than developed countries. Can anyone explain in simple language, i am new in economics field.

Public Comments

1. Welcome to the union. In developing countries the government is not efficient enough to offer certain good and services, the consequence is that the society does not receive it. One measure to solve the problem is to sell public companies to the private sector. The process of sell this companies is crucial because most of the time the new private company is not efficient too. In the developed countries the government can reach a level of efficient when the society receive the goods and service provide by it, so there is not the necessity to sell a public company to the private sector.
2. There is not necessarily any advantage, it has to be looked at case by case. Much of the pressure for privatisation is based on ideology rather than any criteria of economic welfare in the countries concerned and the problem is compounded in developing countries by the high incidence of corruption.