ABSTRACT
This chapter discusses how, and in what ways, the incidence of market failure in the state enterprise sector has limited the introduction of competition and considers what impact liberalisation policies have had in those cases where they have been introduced. It also considers the characteristics of market failure in the state enterprise sector, and the implications of this for the introduction of competition are then assessed. The chapter also discusses sectors in which liberalisation policies appear most promising and considers the obstacles to the introduction of effective competition. It examines liberalisation policy in practice and the discussion is illustrated with analysis of one of the first sectors to be liberalised after the present government came to power. The chapter presents implications for the formulation of liberalisation policy. The implementation of privatisation policy in the UK suggests a paradox. The introduction of competition has been seen as central in raising the efficiency of public sector enterprises.
