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Outline your understanding of the government policies of privatisation and deregulation - Leaving Cert Business - Question 8 - 2018
Question 8
Outline your understanding of the government policies of privatisation and deregulation. Privatisation: Deregulation:
Worked Solution & Example Answer:Outline your understanding of the government policies of privatisation and deregulation - Leaving Cert Business - Question 8 - 2018
Step 1
Privatisation:
Answer
Privatisation refers to the process where a state-owned business is sold to private investors. This policy aims to improve efficiency by allowing private entities to manage and operate services, as competition in the private sector is believed to lead to better quality and lower costs. An example of this is the privatisation of British Telecom in the 1980s, which transformed it from a public utility into a competitive business.
Step 2
Deregulation:
Answer
Deregulation involves the removal of legislative or legal barriers that restrict firms from entering an industry or market. This policy is designed to enhance competition and encourage new businesses to enter the marketplace, potentially leading to lower prices and increased innovation. An example can be found in the airline industry, where deregulation in several countries has resulted in more flight options and reduced fares for consumers.