Privatisation versus Poll Tax: A Public Choice Analysis of the Popularity of Two Thatcher ‘Flagships’

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Abstract
Two major policy innovations of the Thatcher governments are analysed—privatisation and poll tax. A public choice analysis is used to predict and explain why poll tax will be a less popular policy electorally than privatisation. The explanation focuses on the distribution of gains and losses between gainers and losers under the two policies. Two implications of the analysis are that future privatisation issues are likely to continue to be underpriced and that increased central grants will be used to reduce the average level of poll tax.