THE COSTS AND RETURNS OF THE PRIVATIZATION OF NATIONALIZED INDUSTRIES

The sale of public sector industry has become a central plank of UK public policy. This paper concentrates upon the most contentious area of the opportunity cost of share sales. The nature of these costs is related to the revealed objectives of the policy, and the extent to which they differ from expected costs is identified. The nature of the benefits forecast for privatization is explod and questions posed concerning the balance of costs and benefits in current policy. Particular attention is paid to the distribution of returns on the share issues in privatized businesses and parallels are drawn with issues in the private sector.