All Topics  
Public ownership

 

 
   Email Print
   Bookmark   Link
 

 

Public ownership
 
 
  Topics Public ownership Topic Home

Public ownership (also called government ownership, state ownership or state property) refers to government
Government

Government is the body within any organization that has the authority to make and the power to enforce laws, regulations, or rules. Typically, the government refers to a civil government -- local, provincial, or national -- but commercial, academic, religious, or other formal organizations are also administered by governing bodies....
 ownership
Ownership

Ownership is the state or fact of exclusive rights and control over property, which may be an personal property, land ownership, or some other kind of property ....
 of any asset
Asset

In business and accounting, assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower....
, industry
Industry

An industry is the manufacturing of a Good or Service within a category. Although industry is a broad term for any kind of economic production, in economics and urban planning industry is a synonym for the secondary sector, which is a type of economic activity involved in the manufacturing of raw materials into goods and products....
, or corporation
Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate ....
 at any level, national
National government

A national government is a broad coalition government consisting of all parties in the legislature, usually formed during a time of war or other national emergency....
, regional or local
Local government

Local governments are administrative offices that are smaller than a state. The term is used to contrast with offices at nation-state level, which are referred to as the central government, national government, or federal government....
 (municipal); or, it may refer to common (full-community) non-state ownership. The process of bringing an asset into public ownership is called nationalization
Nationalization

Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state....
 or municipalization
Municipalization

Municipalization is the transfer of corporations or other assets to municipal ownership. The transfer may be from private ownership or from other levels of government....
. In primarily market-based economies, government-owned assets are often managed and run like joint-stock corporations with the government owning a controlling stake of the shares.






Discussion
Ask a question about 'Public ownership'
Start a new discussion about 'Public ownership'
Answer questions from other users
Full Discussion Forum



Encyclopedia


Public ownership (also called government ownership, state ownership or state property) refers to government
Government

Government is the body within any organization that has the authority to make and the power to enforce laws, regulations, or rules. Typically, the government refers to a civil government -- local, provincial, or national -- but commercial, academic, religious, or other formal organizations are also administered by governing bodies....
 ownership
Ownership

Ownership is the state or fact of exclusive rights and control over property, which may be an personal property, land ownership, or some other kind of property ....
 of any asset
Asset

In business and accounting, assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower....
, industry
Industry

An industry is the manufacturing of a Good or Service within a category. Although industry is a broad term for any kind of economic production, in economics and urban planning industry is a synonym for the secondary sector, which is a type of economic activity involved in the manufacturing of raw materials into goods and products....
, or corporation
Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate ....
 at any level, national
National government

A national government is a broad coalition government consisting of all parties in the legislature, usually formed during a time of war or other national emergency....
, regional or local
Local government

Local governments are administrative offices that are smaller than a state. The term is used to contrast with offices at nation-state level, which are referred to as the central government, national government, or federal government....
 (municipal); or, it may refer to common (full-community) non-state ownership. The process of bringing an asset into public ownership is called nationalization
Nationalization

Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state....
 or municipalization
Municipalization

Municipalization is the transfer of corporations or other assets to municipal ownership. The transfer may be from private ownership or from other levels of government....
. In primarily market-based economies, government-owned assets are often managed and run like joint-stock corporations with the government owning a controlling stake of the shares. This model is often referred to as a state-owned enterprise.

A government owned corporation (sometimes state-owned enterprise, SOE) may resemble a not-for-profit corporation as it may not be required to generate a profit. Governments may also use profitable entities they own to support the general budget
Government budget

A government budget is a legal document that is often passed by the legislature, and approved by the chief executive-or president. For example, only certain types of revenue may be imposed and collected....
. SOE's may or may not be expected to operate in a broadly commercial manner and may or may not have monopolies
Monopoly

In economics, a monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it....
 in their areas of activity. The creation of a government-owned corporation (corporatization
Corporatization

Corporatization is a more precise term for what often is called privatization, which almost always refers to a process by which formerly public assets or functions are sold or given to corporate entities....
) from other forms of government ownership may be a precursor to privatization
Privatization

Privatization is the incidence or process of transferring ownership of business from the public sector to the private sector . 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....
.

Arguments for and against


See also: arguments for and against privatization
Privatization

Privatization is the incidence or process of transferring ownership of business from the public sector to the private sector . 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....
 and the welfare state
Welfare State

The Welfare State of the United Kingdom was prefigured in the William Beveridge Report in 1942, which identified five "Giant Evils" in society: squalor, ignorance, want, idleness and disease....


For

  • Public services
    Public services

    Public services is a term usually used to mean Service s provided by government to its citizens, either directly or by financing private provision of services....
    . According to the theory of public good
    Public good

    In economics, a public good is a Good that is rivalry ed and excludability. This means, respectively, that consumption of the good by one individual does not reduce availability of the good for consumption by others; and that no one can be effectively excluded from using the good....
    s, some services, such as defence
    Defense (military)

    Defence has several uses in the sphere of military application.Personal defence implies measures taken by individual soldiers in protecting themselves whether by use of protective materials such as armour, or field construction of trenches or a bunker, or by using weapons that prevent the enemy approaching them to initiate close combat....
    , cannot be provided by the private sector directly—only a government system of taxation can finance them. Others (merit good
    Merit good

    A merit good in economics is a Good which is judged that an individual or society should have on the basis of a norm other than respecting consumer preferences....
    s    ), such as education
    Education

    File:Inukshuk Monterrey 1.jpgEducation can be seen as a product or a process and considered in a broad sense or a technical sense. According to philosophy of education George F....
    , can be under-provided by the private sector (according to social standards concerning access to them).
  • Essential services. Certain political theories (namely social justice
    Social justice

    Social justice, sometimes called civil justice, refers to the concept of a society in which justice is achieved in every aspect of society, rather than merely the administration of law....
     theories) consider some services as essential (i.e. providing the service outweighs other concerns, especially commercial ones). A very common example here is health care
    Health care

    File:Ear surgery on a patient.jpgFile:Monoclonal antibodies3.jpgHealth care, or healthcare, refers to the treatment and management of illness, and the preservation of health through services offered by the Medicine, pharmaceutical, Dentistry, clinical laboratory sciences , nursing, and allied health professions....
    . In the case of such essential services, nationalization
    Nationalization

    Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state....
     may ensure their continuation regardless of commercial, environmental, or other external pressures. According to proponents of such theories, these concerns are surpassed by the positive externalities that are deemed likely to result from ensuring the service's availability to everyone.
  • Efficiency. In natural monopolies
    Natural monopoly

    Natural monopoly is a term used in economics to refer to two different things:* An industry is said to be a natural monopoly if one firm can produce a desired output at a lower social cost than two or more firms— that is, there are economies of scale in social costs....
    , competition is wasteful, and will tend to be eliminated by competitive forces (leading to a private monopoly or oligopoly
    Oligopoly

    An oligopoly is a market form in which a market or industry is dominated by a small number of sellers . The word is derived from the Greek language for few sell....
    ). A public sector monopoly
    Monopoly

    In economics, a monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it....
     can be held to account via democratically-elected governments, in a way in which a private monopoly cannot. (A private monopoly may be subject to regulation
    Regulation

    Regulation refers to "controlling human or societal behaviour by rules or restrictions." Regulation can take many forms: law restrictions promulgated by a government authority, self-regulation, social regulation , co-regulation and market regulation....
    , but this may be an inefficient way of securing the public interest.)
  • Accountability. As mentioned above, while a governmental monopoly
    Monopoly

    In economics, a monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it....
     is nonetheless still a monopoly, it is answerable to the electorate
    Constituency

    A constituency is any cohesive body of people bound by shared identity, goals, or loyalty. Constituency can be used to describe a business's customer base and shareholders, or a charity's donors or those it serves....
     rather than a small group of shareholders. (e.g. if the telephone service is nationalised, voters can bring pressure onto the government to provide better services, and parliament may have the power to sack anyone responsible for a reduction in the quality of service).
  • Consumer interests. Public ownership can protect consumer interests in sectors where competition is low, where choices are important but made infrequently, and/or where consumers do not have the expertise to make good decisions (such as in health care
    Health care

    File:Ear surgery on a patient.jpgFile:Monoclonal antibodies3.jpgHealth care, or healthcare, refers to the treatment and management of illness, and the preservation of health through services offered by the Medicine, pharmaceutical, Dentistry, clinical laboratory sciences , nursing, and allied health professions....
    ).
  • Common good. A profitable nationalised industry contributes with its profits directly to the common wealth of the whole country, rather than to the wealth of a subset of its population.
  • Financial security. Public sector institutions have access to finance at government interest rates, which are (almost) always lower than even the most financially secure private sector firms, because the government is unlikely to go bankrupt, which means less risk
    Risk

    Risk is a concept that denotes the precise probability of specific eventualities. Technically, the notion of risk is independent from the notion of value and, as such, eventualities may have both beneficial and adverse consequences....
     to the lender.
  • Work ethic. Employees may be more inclined to view their work positively if it is directed by a management appointed by a government that they have a say in electing, rather than a management representing a shareholding minority. Also, they may gain intrinsic satisfaction knowing their work is important and essential for society as a whole. There has been discussion of a public service ethos which makes public sector workers work harder than they would for a private employer.
  • Equity. Public ownership can help prevent extreme imbalances of wealth.


Against


  • Waste. Government ownership may lead to waste (x-inefficiency
    X-inefficiency

    X-inefficiency is the difference between efficient behavior of firms assumed or implied by economic theory and their observed behavior in practice....
    ) if it proves unable to motivate management
    Management

    Management in business and human organization activity is simply the act of getting people together to accomplish desired goals. Management comprises planning, organizing, staffing, leadership or directing, and Control an organization or effort for the purpose of accomplishing a goal....
     and personnel through appropriate incentives, including appropriate pay
    Pay

    Pay may refer to:*A wage or salary earned for work*The process of payment for goods and services, an aspect of trade*Waterproofing the seams of a wooden ship...
     and threat of redundancy.
  • Consumer choice. Public ownership in an industry which could be competitive in private hands may stifle innovation if proper incentives are not provided by the government. Consumer
    Consumer

    Consumer is a broad label that refers to any individuals or household that use Good generated within the economic system. The concept of a consumer is used in different contexts, so that the usage and significance of the term may vary....
     choice may be reduced and there may be no alternative sources - and no catalysts for alternative sources - of goods or services that better meet consumer preferences.
  • Misinvestment/over-investment
    Over-investing

    Over-investing in finance, particularly personal finance, refers to the practice of Investment more into an asset than what that asset is worth on the open market....
    . Public ownership of profitable services may lead to "gold-plating
    Gold-plating

    Gold-plating is a term relating to European Union law, used particularly in the UK.Gold-plating refers to the practice of national bodies exceeding the terms of European Community European Union directive when implementing them into national law ...
    " (over-investment in assets) if decisions are driven by engineering ideals and not efficiency concerns.
  • Unprofitable companies survive. Public ownership of a loss-making service or industry (such as flu vaccines) may inhibit the changes needed to ensure long-term profitability (or permit bankruptcy). This may mean subsidising unnecessary losses indefinitely.
  • Misallocations of labour and money. The government may be inefficient in running production, trading, or service operations, in the sense of causing misallocations of labour and capital
    Capital (economics)

    In economics, capital or capital goods or real capital refers to factors of production used to create goods or services that are not themselves significantly consumed in the production process....
    , with consequent reductions in the standard of living and economic growth.
  • Accountability. Accountability to the market may be eliminated, and accountability through government may be an insufficient replacement, particularly if an industry or service does not have a high public profile or if the government is not democratic.
  • Influenced by politics
    Politics

    Politics is the process by which groups of people make decisions. The term is generally applied to behaviour within civil governments, but politics has been observed in all human group interactions, including corporation, academia, and religion institutions....
    . Decision-making in the public sector may be prone to interference from politicians for political or populist
    Populism

    Populism is a discourse which supports "the people" versus "the elites." Populism may involve either a philosophy urging social and political system changes and/or a rhetorical style deployed by members of political or social movements competing for advantage within the existing party system....
     reasons. The industry may be over-staffed in order to reduce unemployment
    Unemployment

    File:World map of countries by rate of unemployment.pngUnemployment occurs when a person is available to work and currently seeking work, but the person is without Wage labour....
    ; it may be forced to conduct transactions or actions in certain areas in order to win local votes; it may be forced to manipulate its prices in order to control inflation
    Inflation

    In economics, inflation is a rise in the general price level of goods and services in an economy over a period of time. The term "inflation" once referred to increases in the money supply ; however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflatio...
    . Of course, some of these measures may be considered positive rather than negative, but if they are not taken properly, in the long run they are likely to be an inefficient way to meet the desired goals.
  • Source of Income Sometimes governments are accused for overcharging for products where they hold a monopoly, thus utilising them as an additional source of income, or hidden tax.


See also

  • General
    • Government
      Government

      Government is the body within any organization that has the authority to make and the power to enforce laws, regulations, or rules. Typically, the government refers to a civil government -- local, provincial, or national -- but commercial, academic, religious, or other formal organizations are also administered by governing bodies....
       - Ownership
      Ownership

      Ownership is the state or fact of exclusive rights and control over property, which may be an personal property, land ownership, or some other kind of property ....
    • Ownership
      Ownership

      Ownership is the state or fact of exclusive rights and control over property, which may be an personal property, land ownership, or some other kind of property ....
  • Government ownership / funding
    • State-owned enterprise - Public sector
      Public sector

      The public sector is the part of economic and administrative life that deals with the delivery of goods and services by and for the government, whether national, regional or local/municipal....
       - Public services
      Public services

      Public services is a term usually used to mean Service s provided by government to its citizens, either directly or by financing private provision of services....
       - Public good
      Public good

      In economics, a public good is a Good that is rivalry ed and excludability. This means, respectively, that consumption of the good by one individual does not reduce availability of the good for consumption by others; and that no one can be effectively excluded from using the good....
       - Sovkhoz
      Sovkhoz

      A sovkhoz , typically translated as state farm, is a state-owned farm. The term originated in the Soviet Union, hence the name. The term is still in use in some post-Soviet states, e.g., Russia and Belarus....
       - Non-governmental organization
      Non-governmental organization

      Non-governmental organization is a term that has become widely accepted for referring to a legally constituted, non-business organization created by natural or legal persons with no participation or representation of any government....
       - Government debt
      Government debt

      Government debt is money owed by any level of government; either central government, federal government, municipal government or local government....
       - Government finance
  • Private ownership
    • Private ownership - Ownership society
      Ownership society

      Ownership society is a slogan for a model of society promoted by former United States President George W. Bush. It takes as lead values personal Moral responsibility, economic liberty, and the owning of property....
       - Public company
      Public company

      A public company usually refers to a company that is permitted to offer its registered Security for sale to the general public, typically through a stock exchange, but also may include companies whose stock is traded Over-the-counter via market makers who use non-exchange quotation services such as the OTCBB and the Pink Sheets....
       - Private sector
      Private sector

      In economics, the private sector is that part of the economy which is both run for private profit and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector; private, non-profit organizations are regarded as part of the voluntary sector....
       - Social sector
      Social sector

      Social sector is one of several terms created as alternatives to nonprofit and non-governmental. The latter are seen as putting an emphasis on what this sector is not, rather than calling attention to its focus on a social mission....
       - Stock exchange
      Stock exchange

      A stock exchange, securities exchange or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and trader s, to trade stocks and other security ....
       - Stock market
      Stock market

      A stock market, or equity market, is a private or public Market system for the trade of Corporation stock and Derivative s of company stock at an agreed price; these are security listed on a stock exchange as well as those only traded privately....
       - Consumer debt
      Consumer debt

      Category:FinanceConsumer debt is consumer credit which is outstanding. In macroeconomics terms, it is debt which is used to fund consumption rather than investment....
       - Voluntary sector
      Voluntary sector

      The voluntary sector is the sphere of social activity undertaken by organizations that are Non-profit organizations and Non-governmental organization....
       - Co-operative - Volkseigener Betrieb
      Volkseigener Betrieb

      The Volkseigener Betrieb was the legal form of industrial enterprise in East Germany. They were publicly owned and were routinely combined with other organizational units called Kombinate....
  • Change of ownership
    • Privatization
      Privatization

      Privatization is the incidence or process of transferring ownership of business from the public sector to the private sector . 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....
       - Nationalization
      Nationalization

      Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state....
       - Municipalization
      Municipalization

      Municipalization is the transfer of corporations or other assets to municipal ownership. The transfer may be from private ownership or from other levels of government....
  • Regulation
    • Regulation
      Regulation

      Regulation refers to "controlling human or societal behaviour by rules or restrictions." Regulation can take many forms: law restrictions promulgated by a government authority, self-regulation, social regulation , co-regulation and market regulation....
       - Deregulation
      Deregulation

      Deregulation is a process by which governments remove, reduce or simplify restrictions on business and individuals. It is the removal of some governmental controls over a market....
       - Liberalization
      Liberalization

      In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. Liberalization of autocratic regimes may precede democratization ....