Public indebtedness is at its highest peacetime levels in advanced economies after the trauma of the global financial crisis. In Italy, for instance, the public-debt burden is a dizzying 130% of GDP. Emerging economies, meanwhile, have been slowing down after years of impressive growth. Given the squeeze on public coffers, is now the time to take a hard look at which assets could be put on the block—as any household would do in the same situation?
A lot remains in public hands, even in countries where there have already been several waves of privatisation. OECD(Organisation for Economic Co-operation and Development) countries have state-owned enterprises worth $2 trillion, as well as a similar amount of assets held by local and municipal governments. Even more value is locked up in "non-financial" assets, such as land and buildings.
Some argue on practical grounds that now is not the time to sell because prices are not perfectly parallel. Others point out that many past sell-offs, in Europe, Latin America and elsewhere, were botched because the right regulatory frameworks were not put in place first. Yet others insist that privatisation is almost always a mistake, pushed by right-wing ideologues who exaggerate the benefits and downplay the improvements that can be generated by simply increasing the professionalism of management in the public sector. On the other side, supporters argue that privatisation is a useful tool for any government seeking to bring its spending in line with revenues, and that it generally improves overall economic efficiency by boosting competition and by applying private-sector capital and skills to hidebound assets.
