Finance as Driver of Privatisation

Jörg Huffschmid

Chapter 4 in Privatisation against the European Social Model, 2009, pp 49-60 from Palgrave Macmillan

Abstract: Abstract This chapter deals with the particular role which finance plays as a driver of privatisation. The thesis is that during the last two decades private and public finances have moved in opposite directions and generated specific pressures, for which privatisation of public goods and services appears as a solution. The accumulation of private financial assets creates pressure to find more investment opportunities, and the political bias for balanced budgets and tax competition leads to pressure to cut expenditure in public services, which appear increasingly unaffordable. Privatisation offers both relief for public budgets and opportunities for private asset owners. In the course of this development, individual entrepreneurs and the production-oriented management are gradually replaced by financial investors as key actors of capitalism which can therefore be characterised as finance-led capitalism.

Keywords: Gross Domestic Product; Institutional Investor; Pension Fund; Hedge Fund; Pension System (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-25068-0_4

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DOI: 10.1057/9780230250680_4

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