Stevens, Jim (1984) Privatisation. Quarterly Economic Commentary, 10 (1). pp. 66-68. ISSN 0306-7866

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For many politicians and academic commentators privatisation has implications reaching far beyond the mere transfer of ownership. Conservative governments have in the past introduced denationalisation programmes although never on the present grand scale. As Simpson (1984) and others have pointed out, the Government and its supporters often fail to distinguish between the effects of denationalisation and the benefits of liberalisation. It is a widely held view that nationalised industries are less efficient than private companies. Although Heald & Steel (1982) are doubtful about this proposition the essence of their argument can be summarised as follows: "public enterprises are intrinsically less efficient than private enterprises because they are insulated from the disciplines of the capital and product markets" (p.339). It is at this point that the distinction between liberalisation and denationalisation must be drawn and this economic perspective will attempt to delineate the reasons why.