Privatization
Also called: corporatization
When the ownership of a public company is transferred from the public to the private sector, we speak of privatization. Privatization can include an IPO of the company or its acquisition by a market party.
Examples in the Netherlands of originally state-owned utilities that have been privatized include Dutch Railways, KPN and PostNL. Many utilities were historically owned by municipalities and provinces.
Often some of the shares are held by the government, in order to influence the company's stock price or to be monetized at a later date. In some cases, all shares remain owned and a privatization consists only of corporatization and commercialization of the organization. This can be a first step toward (full) privatization.
Liberalization
Many privatizations are partly the result of the liberalization of sectors that were originally seen as basic public needs. In this, the monopoly of public companies was often regulated by law. An example is the postal market. Partly due to European regulations, many such industries are now liberalized, creating room for competition.
On the one hand, liberalization and privatization have led to more choice and innovation. On the other hand, this may cause companies to divest their loss-making operations and may result in service and working conditions being cut.
Nationalization
The opposite of privatization, which is the transfer of ownership from private companies to the government, is called nationalization. This happened, for example, to several financial institutions during the credit crisis, both in the Netherlands and elsewhere in the world. Several banks were saved in this way, not only to protect the interests of savers but also to prevent a systemic crisis with major social consequences. Meanwhile, many of these institutions are back in private hands
