Privatization is the act of opening up previously state-owned corporations, assets, service or economic sector to private enterprise, though it can also be used to refer to public private partnerships, such as operating concessions, or Build Operate Transfer schemes. Privatization has been encouraged by the IMF and World Bank in both wealthy and developing nations since the Second World War, but particularly since the 1980s. It is mostly responsible for the transformation of poor quality public services delivered in a top-down authoritarian manner to customer-focused, flexible, innovative, more efficient and transparent services, as well as unlocking the potential of private sector profit-focused investment that have transformed services such as water and telecoms in the developing world.
As well as proving economic and quality of life benefits to citizens in developing countries, it is a major factor in improving rule of law, accountability, transparency, democracy and personal freedoms, by integrating the economies of developing countries with those of the west, thus leading to greater incentives to reconcile regulatory, legal and political standards, as well as encouraging the local population to accept responsibility for development of their country, through participating in an opening market and thus directly affecting the way these services are provided by exercising their consumer choice in service provision, and by making stock investments in publicly traded, rather than state monopolist utilities.
Some privatization programs have been strangled by excessive state regulation that has prevented them becoming honest, successful private ventures. For instance, the Dulles Greenway in Virginia has not turned a profit, due to excessive government regulation, and the fact that the state distorts free-market mechanisms by operating "free" roadways funded from taxpayers money.
Many leading economists, such as Murray Rothbard, hold that all government services can and should be privatized, with citizens and businesses contracting directly with private firms for protection.