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Reframing privatisation: Deconstructing the myth of efficiency

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Abstract

In the context of ongoing scandals about public versus private ownership, we review the rise and fall of British nationalised industries, and the subsequent rise of privatisation based on perception of market-based efficiency as a means of improving public service. We evaluate the theoretical and empirical arguments around privatisation and find that the argument of privatisation as a vehicle for efficiency gains is a myth. Instead, we suggest that efficiency is not solely a matter of ownership, but requires a complex interplay of social and commercial variables to make it possible. We call for a more inventive and flexible approach in the search for efficiency in the public sector.

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Authors and Affiliations

  1. Centre for Director Education, Leeds Business School, Leeds Metropolitan University, Bronte Hall, Beckett Park, Leeds, LS6 3QS, UK

    Steve R. Letza

  2. Commerce Division, Lincoln University, P.O. Box 84, Canterbury, New Zealand

    Clive Smallman

  3. Lecturer in Business Strategy, Leeds Business School, Leeds Metropolitan University, Bronte Hall, Beckett Park, Leeds, LS6 3QS, UK

    Xiuping Sun

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  1. Steve R. Letza
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  2. Clive Smallman
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Letza, S.R., Smallman, C. & Sun, X. Reframing privatisation: Deconstructing the myth of efficiency. Policy Sciences 37, 159–183 (2004). https://doi.org/10.1023/B:OLIC.0000048530.30139.98

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