Privatization and economic performance throughout the UK business cycle

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Abstract
Since 1979, many state‐owned industries in the UK have been sold to private shareholders. Initial studies of the impact of privatization on performance were unable to distinguish once‐and‐for‐all shake‐out effects and those that were part of a continuing process. Moreover, the immediate post‐privatization period often coincided with the boom conditions of the late 1980s. Using two standard performance ratios, this paper examines these issues by tracking the record of eleven firms that were privatized in the 1980s. The results make it difficult to sustain the hypothesis that private ownership is unequivocally more efficient than nationalization.