nationalisation

Question 1

nationalisation

Answer 1

process of taking industry into public ownership

Question 2

arguments in favour vs against

Answer 2

-greater economies of scale (productive efficiency and lower costs)
-focus on service provision: allocative
-less likely to be market failures that arise, consider full social cost and benefit
–public sector can be a vehicle for macro control: employment levels

-diseconomies of scale
-lack of incentive to minimise cost
-compalcent and wasteful production
-lack of supernormal profit ( due to no incentive)
-highly expensive and tax burden
-higher prices
-political priorities override commercial issues

Question 3

evaluation of nationalisation

Answer 3

-funding vs delivery
-PPPS better ( public private sector)
-role of reg
-competition in private sector
size and objective of private sector firms