National and International Developments

Privatization as a National Phenomenon

The modern state in Europe, developed out of the national consciousness of its citizens, is by its very nature a national state. This does not mean that we cannot find different forms of public life in a country or congruence between governments in different countries. Belgium may serve as an example; after establishing a new constitution, the Walloon and the Flemish parts of the public administration have developed in different directions. The nature of public law, which is quite similar on the whole continent, confirms the second statement. However, the administrative practice of the European Community (EC) highlights what in administrative science is classified as the difference between classical administration — such as in France, Germany, etc. — and civic culture administration — for example Great Britain.

Despite such distinctions, the line between public and private functions is drawn by the political-administrative culture of the national state. This can clearly be seen by the different meanings for the term “privatization”. Even within the European context, it is difficult to discuss privatization under this term as different approaches are subsumed according to the various national experiences. For some, extending the autonomy of a public enterprise or introducing profit orientation constitutes privatization. For others the term privatization is restricted to a transfer of ownership either in the formal sense of changing the legal structure, or in the material sense of an actual transfer of ownership. Taking into consideration the situation outside Europe, including the developing countries, means adding more problems to the understanding of the term privatization. Often, the only solution is to specify the respective politico-economic problem.

The distinction between public and private functions in the first place determines which instruments can be applied later to change this distinction in favour of the private sector. This is obvious in the case of the United States of America. In accordance with the distinctive administrative culture there the discussion on privatization centres on certain instruments such as contracting-out, franchise, voucher system and self-service arrangements.