Edited by Susan Rose-Ackerman and Peter L. Lindseth
Chapter 29: Three Questions of Privatization
Daphne Barak-Erez* Privatization cuts through borders and cultures and is driven by a complex set of factors, partly ideological and partly economic. It can lead to new forms of government action and should therefore be a major focus of public law, both constitutional and administrative.1 Privatization decisions are policy choices, but these choices also have legal relevance. Its opposite, nationalization, has always been discussed not only as a matter of public policy but also as a matter of law, due to its impact on property rights. This understanding should serve as a catalyst for further study of the public law of privatization. The current financial crisis has reinvigorated discussion of nationalization initiatives in the form of bailout programs or partial government takeovers. Nevertheless, nationalization is still perceived as an exception, which retains as its long-term goal a return to private ownership. The current crisis is yet another illuminating example of the importance of regulating private activities, a central issue to any discussion of the public law of privatization. Legal scholarship has already begun discussing the implications of privatization for public law but, so far, without offering a general framework for analysis. By contrast, I argue that, rather than meriting some merely doctrinal adjustments, privatization is a fundamental process that calls for the re-evaluation of public law, leading to the development of a new sub-area focusing on the public law of privatization.2 This chapter offers an initial outline of a public law of privatization. Specifically, it presents a model for analyzing...
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