What is privatization?

Privatization refers to the process of transferring ownership of publicly owned enterprises, assets, or services to private entities. This often involves the selling-off of state-owned businesses or the outsourcing of public services to private firms. The fundamental idea behind privatization is that private ownership can lead to increased efficiency and innovation in service delivery or production, as private companies are typically driven by profit motives and face market competition.

In contrast, the other options convey different concepts that do not align with the definition of privatization. Acquiring additional public services describes an expansion of public service offerings rather than a transfer of ownership. The transfer of ownership from private to public entities describes nationalization, which is the opposite of privatization. Regulation of private companies by the government involves oversight rather than ownership transfer and is more related to ensuring compliance with laws and standards instead of changing ownership structures. This distinction illustrates why the selling-off of publicly owned enterprises to private owners is the foremost definition of privatization.