Privatization has four distinguishing qualities: an increase in private ownership, competition, deregulation, and reducing reliance upon public funds. It is a multidimensional concept involving trade-offs between competing objectives in a continuing process of dissatisfaction and satisfaction. Thus, to understand the dynamics of privatization we need to consider in which direction government is moving. The extensive British experience shows that there can be a large reduction in public ownership and public subsidies without promoting competition and even introducing new forms of regulation. Three extreme "satisficing" goals are considered: renationalization through the back door of regulation and subsidy; further privatization of public enterprises selling goods and services; and the privatization of social programs. The most likely political equilibrium involves a mixture of both state and market calculations rather than a rigid separation of activities into purely private or purely public.
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