Entry
Entries A-Z
Nationalization
The process of extending public ownership of enterprises in a national economy (also known as “deprivatization”). Nationalization frequently occurs in the public utility sector of a macroeconomy. Public utilities, such as transportation, telecommunications, water supply, health, and natural gas, are normally taken over by the government when they are endangered by improper or inefficient management that imperils the provision of services or the stability of a government. These services are critical, and the demand for them is highly inelastic.
Private companies may also be appropriated by governments, although international law inveighs against such a practice, especially without adequate compensation. In some developing countries, foreign investments have been expropriated because of a perception of exploitation, evasion of tax laws, or corruption. For example, nationalization, or seizure of ...