Which of the following is a stated reason for privatization?

• A. To reduce inefficiency in the public sector
• B. To expand the private sector
• C. To increase government ownership
• D. To provide more public services

Answer: (A)

Privatisation rests on the idea that moving a business from government ownership to private ownership can make it run more efficiently because private firms face stronger incentives to cut costs and respond to customers. The stated reason for privatization is to reduce inefficiency in the public sector, since private ownership brings profit motivation and competitive pressure that can improve performance. Expanding the private sector might happen as a broader goal, but it isn’t the explicit aim of privatizing a public enterprise itself. Increasing government ownership goes against privatization, while providing more public services is typically associated with keeping activities in the public sector rather than privatizing them.