From what ive read, consumers are definitely not the beneficiaries in such arrangements. Why do governments do this then? Why give up ownership and control of vital stuff (e.g. water, utilities, highways, etc.) to private – and often – foreign entities?
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In most cases, privatization is harmful. In some cases, it’s a way to borrow money without borrowing money. Let’s say, a city sells its parking meters and spaces to a private company. The company pays the government a lot of money now so the current mayor can brag that he balanced the budget. Future mayors have a problem, because they no longer receive revenue from parking meters. If the company raises prices, it feels like a tax increase to residents. It’s like a tax increase where the government gets no money for schools and stuff.
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