Sometime during the 1980s, a major international political movement was born. Led by Great Britain, scores of nations began – or considered – selling publicly owned enterprises to private corporations or shareholders. While the early plans primarily involved industrialized nations in Western Europe and Japan, privatization rapidly caught on worldwide. Less developed countries, prodded by international lending agencies, began experimenting seriously with asset sales. The United States government, which had stayed mostly on the sidelines while many other countries developed state-owned enterprises, began sifting through its assets looking for something to sell. By the early 1990s, former bastions of state ownership – Russia, Poland, Czechoslovakia, and Hungary – not only had joined the privatization parade but were embarking on some of the most aggressive efforts in the world. According to some, this movement amounts to nothing less than a “revolution.”

Privatization, defined broadly as “the shifting of a function, either in whole or in part, from the public sector to the private sector,” involves the increased reliance on private actors and market forces to take over functions or responsibilities that had in recent decades come to be regarded as properly within the governmental sphere. Despite its rather late appearance on the radar screen of public awareness, privatization has recently received plenty of attention from academics, policy-makers, and the international media. Much of this attention, however, is misdirected. While there are scores of articles describing privatization initiatives in one country or another, most of these have focused on their immediate fiscal implications.