Privatization Law

Privatization, also known as "full divestiture" occurs when all or most of the interests of a government agency in an asset is transferred to the private sector (for example, electrical utilities being turned over to private companies). Full privatization is different than a joint venture between public and private parties (see Joint Ventures for more information on the roles of joint venturers).

Privatization has increasingly been seen as an approach to improve efficiencies, as government bureaucracies are notoriously inefficient and wasteful of public funds. Privatization provides governments a way to use public funds to set up needed public works projects, then allow private companies to carry out the daily operations of those activities. Similarly, privatization can apply to transferring government properties to private owners, like selling off lands formerly occupied by government buildings or military bases.

Laws regarding privatization provide the authority and procedural requirements for ensuring that transfers occur in an open and responsible manner. For example, these laws often prohibit deals between those with political influence and companies with which they have a financial interest. They may also specify the requirements of any public entity taking over responsibility for formerly public services to ensure that prices do not become prohibitive for consumers and that the same or comparable levels of service are provided to the consumers after transfer.

The resources provided below on this page provides additional information on legal issues arising in the course of privatization. Additionally, should you be interested in participating in the acquisition of privatized government resources, you can find an attorney to assist you under the "Law Firms" tab on the menu bar, above.


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