Nationalization or Privatization? The Fragmentation of the Mainstream

Abstract

The 2008 global crisis brought about curiously inconsistent changes in state ownership: asset sales by governments and purchases of private stocks increased sharply and simultaneously. These concurrent instances of nationalization and privatization, on a major scale in historical terms, deserve attention. The paper examines why both now seem appropriate tools for crisis management in Europe and in the USA. It also estimates the scale of changes after 2008. The author argues that the rapid alternation, including parallel applications and mixed, 'silent' forms of nationalization and privatization, reflects ambiguity in political, theoretical and popular views. The uncertainty far exceeds ownership issues to include the role of the state in general, revealing fragmentation of measures in each direction: neither nationalization nor privatization has been based on any integrated, defined paradigm of economic policy.So what are the main features of the process this time and the reasons behind the moves? Are all the features specific, or do they have attributes in common with the courses followed in previous crises? The approach to these questions taken here involves interpreting nationalization and privatization not just as ownership changes, but as political decisions embedded in a broader context of economic policy, considered in connection with changes in the role of the state. 1 The approach applied is also a historical one, which allows the temporal and territorial differences to be identified and explained.The paper begins by sketching the main characteristics of nationalization and privatization waves in twentieth-century Europe, as a context for interpreting the post-2008 events. It recalls the distinct, yet connected events of the recent process: nationalization and re-privatization of financial institutions accompanied by contracting and expanding public ownership in other sectors. It includes a comparison with the moves made in the USA, given their great role and the country's different traditions.

What Do Citizens Think About Public Enterprises? Subjective Survey Data on the Legitimacy of the Economic Activities of the German Public Sector

“…Statistics also show that the activities of public enterprises have been rising above average in number and turnover in recent years . Voszka () explains this trend as a result of an increasing mistrust of private sector corporations by citizens and politicians in the aftermath of the 2008 financial and economic crisis…”

Motives of mergers and acquisitions by state-owned enterprises

“…Tables 1 and 2 provide information on the number of M&As performed by SOEs, broken down by geographical and sector distribution in our sample. The most significant features in our data are the high number of deals performed in Western Europe and the Far East and Asia, in line with larger waves of nationalizations that occurred in the last two decades (Voszka 2017), and the considerable share of cross-border deals. In fact, although the number of domestic deals is higher than the number of cross-border deals (204 and 151, respectively), the significant share of cross-border deals underlines the sizable participation of SOEs in the market for cross-border acquisitions, in line with recent empirical evidences (Karolyi and Liao, 2017).…”

State-owned enterprise sector, 2019

“…This conclusion may be premature as influential mulitilateral organisations such as the World Bank, International Monetary Fund, OECD and EU continue to encourage privatisation and other related policies. Moreover, available evidence shows that the current period in the aftermath of the global financial crisis is characterised by concurrent shifts towards public ownership in some sectors but towards private ownership in others (Voszka, 2017).…”