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Privatization is occurring at various levels of government in many countries around the world. So extensive is the reform programme that the term “reinventing government” has taken on a fashionable gloss. To date, privatization and market testing programmes have been advocated with surprisingly little exploration of the internal changes that are likely to be necessary if performance is to improve as expected. Explores the type of internal changes that are likely to be necessary if privatization is to have a beneficial impact on performance.

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