The UK Privatisation Model: Is it Transferable to Developing Countries?

This chapter seeks to consider the transferability of the UK privatisation ‘model’ to less developed countries (LDCs). In the UK, the privatisation programme has been driven by both political ideology and pragmatism. The inclusion of privatisation on the policy agenda in many LDCs reflects a similar confluence of political ideology and pragmatism. Privatisation is one element in a general shift in development policy away from the dirigiste approach that characterised development thinking in the 1950s and 1960s. The public enterprise sector lies at the heart of the privatisation debate, and dissatisfaction with the contribution of the state-owned enterprises to the development process constitutes the single most important motivation for privatisation in LDCs. Privatisation, in the form of a change of ownership, has been advocated on the grounds that it will have a significant impact on economic performance at the enterprise level. Resistance from interest groups that stand to lose from privatisation is likely to form a powerful political constraint.