What does privatisation mean?
Privatisation is the transfer of a government-owned business, asset, or service to private ownership, or the broader reduction of direct state involvement in economic activity. It is especially prominent in discussions of utilities, transport systems, housing, healthcare, and state-owned industries. Depending on the policy, privatisation can introduce competition, attract investment, and change how services are financed, but it can also raise concerns about affordability, regulation, employment, and accountability. The word is closely associated with the economic policies pursued in Britain during the 1980s and 1990s, although the practice is neither exclusively British nor confined to that period. “Privatisation” is the standard British spelling, while “privatization” is used in American English. In broader usage, the word can also describe any significant shift away from public or collective control toward private ownership.
nounThe transfer of ownership or control of a government-owned asset, business, or service to private individuals or companies. It may also refer more broadly to the process of reducing the role of the state in economic activity.
- The process or policy of transferring ownership or control of a state-owned asset, industry, or service to private ownership.
- More broadly, the reduction of direct state participation or intervention in economic activity.
"The government proposed the privatisation of the regional electricity company."
"Privatisation of the water company led to higher household bills and widespread public criticism."
"The debate over privatisation also raised questions about accountability, competition, and public services."
The plural is used when referring to multiple processes, policies, or instances of privatisation.
"The privatisations of several state-owned utilities were fiercely debated."
Privatisation turned the ownership question into a defining political debate: who should control essential industries, services, and natural resources?
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does privatisation come from?
Privatisation was formed in the 19th century from “private” and the suffix “-isation,” meaning the process of making something private. “Private” comes through Old French privé from Latin privatus, a term associated with being apart from public or communal life. The same Latin root underlies cognates including “privy” and, through the more directly related English stem, “privatise” and its North American variant “privatize.”
Related word forms
How privatisation is actually used
Most common in British, Australian, and other varieties of English that use “-isation”; the standard US spelling is “privatization.” The term is especially associated with economic and political policy, though it can be used more generally whenever ownership is transferred from the public sector to private hands.
Easily confused with privatisation
Privatisation is the British spelling, while privatization is the standard American spelling of the same word.
Privatisation transfers ownership or control to private owners, whereas nationalisation transfers an industry or asset to public or state ownership.