ABSTRACT
INTRODUCTION Privatization of publicly owned productive enterprises has been a key element in the economic policy portfolio of the Conservative Government in the UK in the 1980s. Such a policy fitted closely with their professed beliefs in the efficacy of markets and private ownership compared to the failures of government resource allocation and state ownership (see Wolf 1990 for a critique). The process of privatization, however, is not always complementary to the promotion of competition. Indeed, it might be argued that in the UK, the method and execution of privatization positively hindered the development of competitive market structures in a number of cases. This resulted from the emphasis of policy upon changing ownership for reasons other than the promotion of competitive markets, which might have led to greater gains in both allocative and productive efficiency than were actually achieved. Thus, publicly owned monopolies become privately owned monopolies thereby depriving the economy of many of the claimed benefits of private ownership, which are dependent upon the presence of competition in the product market.
