Privatization and Globalization : The Changing Role of the State in Business
Arguably, the two most important forces affecting the world economy in the closing decades of the 20th century were globalization and privatization. Here, privatization refers to the retreat of the state from the economic arena, while globalization refers to the worldwide spread of efficient market-based systems and the consequent growth of multinational firms. The twin forces of privatization and globalization have proceeded in parallel, but have nonetheless had significant interactions with one another. (i) the spectacular collapse of the state-run socialist economies; (ii) the transfer of state-run enterprises to market governance in much of Western Europe; and (iii) the more subtle dismantling of state controls and legal monopolies in some sectors in the United States.