ADVANTAGES AND DISADVANTAGES OF GOVERNMENT OWNERSHIP OF PUBLIC CORPO­RATIONS

The establishment of public corporations by government helps to confer monopoly on these corporations thereby removing duplications that could have arisen if certain essential services were to be provided by private enterprises.

ADVANTAGES OF GOVERNMENT OWNERSHIP OF PUBLIC CORPO­RATIONS

  • Provision of essential services: Government is involved in ownership of public corporations because of the provision of essential services, which it renders to the public.

  • Prevention of exploitation and discrimination: Exploitation and discrimination associated with private and public enterprises are prevented as a result of government ownership of enterprises.

  • Creation of more employment opportunities: With the ownership of public corporations vested in the hands of the government, more employment opportunities are created.

  • Protection of some strategic industries: Some strategic industries, e.g. oil industry, airport are seaports, are protected against foreign ownership and control.

  • Economic development: Government set up public corporations to enhance the economic development of the country.

  • Higher standard of living: The provision of infrastructural and social amenities and services by public corporations, e.g. water, roads, airport and electricity, helps to raise the standard of living of the people.

  • It confers monopoly: The establishment of public corporations by government helps to confer monopoly on these corporations thereby removing duplication that could have arisen if certain essential services were to be provided by private enterprises.

  • Even distribution of services: With public corporations, certain services, e.g. electricity, are evenly distributed to many parts of the country.
  • Generation of revenue: Public corporations are set up sometimes to assist the government generate running costs at least or self-sustaining revenue.

  • Affordable and cheap services: As a result of the huge capital invested in public corporations, they enjoy economies of large scale production, which result in the production of cheap goods and services.

  DISADVANTAGES OF GOVERNMENT! OWNERSHIP OF PUBLIC COR­PORATIONS

  •  Lack of choice by consumers: As result of ownership of public corporation by government, which leads to monopoly consumers are denied their right to choose between alternatives.

  •  Frequent interference: Government officers always interfere in the activities of public corporations and this tend to lower their productivity.

  • High level of corruption: There is a high level of corruption in public corporate in because the workers and officials believe that government properties are nobody properties.

  •  Lack of qualified personnel: Inefficient and unqualified personnel are always employed to work in public corporations because such appointments are base on political considerations.

  •  High level of inefficiency: The required efficiency that would ensure the ma of profit in private enterprise is complete lacking in public corporations.

  •  High level of bureaucracy: As a result of government ownership of public corporations, there exists high level bureaucracy and red-tapism, which cannot create opportunity for effective performance.

  •  Neglect of private sectors: Private sectors are sometimes neglected bee the government tends to pay attention to public corporations.

 Government instability: As a result of frequent changes of government, the also frequent changes in board corporations, which do not ensure their effectiveness

let us know what you think

This site uses Akismet to reduce spam. Learn how your comment data is processed.