Deregulation and Competition as Control

Abstract

The transfer of publicly owned businesses and assets to the private sector has become the main element in popular thinking about privatization. However, liberalization or the creation of alternative providers or suppliers in the marketplace, through the elimination of controls on individual action and the encouragement of new and more varied market entrants, has been consistently pursued. Liberal critics of privatization often call for more deregulation, particularly the promoting of product and service competition (Beesley, 1992, p. 15). Yet, these critics fail to appreciate the extent to which the Thatcher governments pursued liberalization and came to recognize the weakness of simply reducing barriers to entry. Instead, the government’s actively provided incentives for entry into competitive markets. Thus, in addition to property ownership and regulation, competition constitutes a distinctive means of indirectly influencing the way participants coordinate their actions.