Agency Status, Privatization and Improved Performance: Some Evidence from the UK Available to Purchase

The 1980s saw a resurgence of the notion that transferring assets from the public sector to private enterprise would raise both allocative and technical efficiency, leading to greater economic well‐being. This resurgence led in the UK and elsewhere to privatization and the transfer of state activities from Government departments to separate agencies. Tests arguments that performance is linked to ownership by considering ten organizations which underwent relevant status changes in the post‐war period. Results confirm that, in general, a political to private change in ownership is associated with improved performance, but that this performance improvement is not guaranteed. Thus the link between ownership and performance is apparently more complex than many commentators have assumed. Findings suggest that further research is needed to address the factors that determine performance.