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Privatization may mean the government sells state-owned businesses to private interests, but it may also be discussed in the context of the privatization of services or government functions, where private entities are tasked with the implementation of government programs or the performance of government services.
Privatization is the process of transferring ownership of a business, enterprise, agency, charity or public service from the public sector (the state or government) or common use to the private sector (businesses that operate for a private profit) or to private non-profit organizations.
The private sector employs most of the workforce in some countries. In private sector, activities are guided by the motive to earn money, i.e. operate by capitalist standards. A 2013 study by the International Finance Corporation (part of the World Bank Group) identified that 90 percent of jobs in developing countries are in the private sector. [1]
A mixed economy is an economic system that accepts both private businesses and nationalized government services, like public utilities, safety, military, welfare, and education. A mixed economy also promotes some form of regulation to protect the public, the environment, or the interests of the state.
A public–private partnership (PPP, 3P, or P3) is a long-term arrangement between a government and private sector institutions. [1] [2] Typically, it involves private capital financing government projects and services up-front, and then drawing revenues from taxpayers and/or users for profit over the course of the PPP contract. [3]
Economic liberalization, or economic liberalisation, is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liberalism and neoliberalism .
In recent years, there has been interest in expanding P3s to multiple infrastructure projects, such as schools, universities, government buildings, waste and water. Reasons for expanding public-private partnership in the United States were initially cost-cutting and concerns about Public debt.
This produces competition within the private sector to gain these contracts that then reward the organizations that can supply more cost-effective and quality goods and services. Some contracts also have specific clauses to promote working with minority-led, women-owned businesses and/or state-owned enterprises. [11]