nationalisation

Question 1

definition

Answer 1

Process of taking an industry into public ownership

Question 2

Arguments in Favour:

Answer 2

• Greater EoS due to massive output
• More focus on service provision
• Less likely to be market failures arising from externalities and self interest
• Public sector can be a vehicle for macroeconomic control

Question 3

Arguments against:

Answer 3

• DEoS
• Lack of incentive to minimise costs
• Complacent and wasteful production
• Lack of SNP
• Highly expensive and a burden on taxpayer – opp. Cost?
• Higher prices due to low competition
• Greater risk of moral hazard
• Political priorities override commercial issues