ABSTRACT
INTRODUCTION A central tenet of Conservative policy in the 1980s was that public enterprises would be managed much more efficiently in the private sector, not least because the power of the public sector unions would be reduced. In the public sector, the unions’ hand was strengthened by the absence of the threat of bankruptcy, and they had been able to involve governments ‘in the interests of their political objectives if not in the interests of their members’ (Moore 1986:89). Even where public monopolies were turned into private ones, it was claimed, privatization would have a beneficial effect since private ownership itself would increase ‘X-efficiency’: that is, management and shareholders would have an incentive to increase efficiency since they could hope to appropriate the resulting gains, regardless of any pressures to efficiency from competitive market structures.
