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Privatization is a public policy decision to reduce the role of the state in the economy. It is a process that transfers control of economic and financial resources from a government to a private sector entity. In the 1990s alone, global privatization receipts totaled $936.7 billion. Among the key industries affected were telecommunications, postal services, electric and gas utilities, airlines, railroads, coal mining, iron and steel manufacturing, and banking. Italy had the largest privatization program, followed by France, Australia, the United Kingdom, Spain, Mexico, and Portugal.

The impetus for privatization stems from evidence that direct state ownership or control of major national industries and companies cannot create adequate economic growth and prosperity for the future. In the former Soviet Union and Eastern Europe, privatization represented the ...

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