Options for Federal Privatization and Reform Lessons from Abroad

60 Pages Posted: 3 Sep 2016

Date Written: June 28, 2016


The American economy is sluggish, the government is running large deficits, and the public is frustrated with the poor performance of federal bureaucracies. One reform that can tackle all of these problems is privatizing federal businesses and assets. This study discusses a dozen advantages of privatization and describes government activities that should be moved to the private sector.

A privatization revolution has swept the world since the 1980s. Following the United Kingdom’s lead, governments in more than 100 countries have transferred thousands of state-owned businesses to the private sector. Railroads, airports, energy companies, postal services, and other businesses valued at more than $3 trillion have been privatized. Governments of both the political right and left have unloaded state-owned businesses.

Despite the global success of privatization, reforms have largely bypassed our own federal government. Indeed, many activities that have been transferred to the private sector abroad remain in government hands in this country. That creates an opportunity for U.S. policymakers to learn from foreign privatization and enact proven reforms here.

This study describes why the federal government should privatize the U.S. Postal Service, Amtrak, the Tennessee Valley Authority, the air traffic control system, lands, buildings, and other businesses and assets. Such reforms would increase efficiency, spur innovation, create greater transparency, and improve the environment.

Privatization would allow entrepreneurs to take on challenges at which federal bureaucracies are failing. The United States is a land of huge talent and diversity. But to take full advantage of those assets, we should divest the government of activities that individuals and businesses can perform better by themselves.

Keywords: Privatization, Federal Government, Amtrak, U.S. Postal Service, Private Sector

JEL Classification: H42, H41

Suggested Citation

Edwards, Chris, Options for Federal Privatization and Reform Lessons from Abroad (June 28, 2016). Cato Institute Policy Analysis No. 794, Available at SSRN: https://ssrn.com/abstract=2833921

Chris Edwards (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics