ABSTRACT
The economic case for privatisation is more commonly made in terms of its impact on micro, or enterprise, level performance. This chapter focuses on the fact that much of the pressure for privatisation stems from macro level concerns. It argues that public sector investment can lower private investment if it utilises scarce resources that would otherwise be available to the private sector, where, public sector investment is financed by taxation or debt issue which is paid for from the private sector’s investable surplus. Few countries have been immune from the worldwide interest in privatisation. The economic rationale for widespread programmes of privatisation is not yet firmly established, and there may be legitimate doubts as to the economic gains of privatisation. The resistance from interest groups that stand to lose from privatisation is likely to form a powerful political constraint.
