Answer to Question #41413 in Macroeconomics for dan

Question

arguments in favour of privitisation include:

Answer 1

Economists offer several arguments in favor of transferring government run firms to the private sector:

- Opening up production and consumption to market forces increase competition, economic efficiency and consumer choice.
- Breaking down monopolies into more competitive industries introduces competition into the goods markets.
- Enables the privatized firms to compete for finance on the private capital markets both home and abroad.
- Ensures that firms become accountable to their shareholders and their desire for profit.
- Ensures that businesses are run on commercial rather than political grounds.
- Reduces the burden on the government's finances to support nationalized industries.