Eli5: How does privatization of an essential public good/service/infrastructure work and what are the reasons behind it?

Question

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?

In: 142

Answer 1

Government sometimes gets captured by industry. This is usually done through unfettered political donations. Once captured, government will sell off essential services so that private entities can profit off of them.

People are fond of calling government inefficient. The profit that a private entity extracts from providing a public service is another form of inefficiency.