By Sunday Iduh
According to the proponent of Public Choice Theory, those who are seeking benefit or interest from the government join to get favourable legislation enacted. It means that individuals with concentrated interest in increased expenditure take a free ride on those with diffuse interest in lower taxes.
This theory was developed through studies of public management of land, water, forests and comparative analysis of public and private enterprises. The public choice theory indicted public ownership and management. Public ownership according to this exponent leads to what has been termed, the tragedy of the commons.
This means that individuals acting out of rational self-interest can abuse and ultimately destroy what is commonly owned but take good care of their own private property.
Thus, the dilemma of the common is applicable to any limited resources to which access is unlimited by fee or regulation. This makes publicly managed organizations suffer from worse management than privately owned ones.
The reason is, value is dissipated through self-aggrandizing expansionary policies. Like the property rights theory, the public choice theory assumes that democratic politics have inherent tendencies towards government growth and excessive budgets.
Benue State Governor, Samuel Ortom in his characteristic nature of ensuring prudent management of resources, recently reconstituted the Benue State Council on privatization and Commercialization of Enterprises.
The Council is expected to deploy all that is required in order to industrialize the state through private sector participation in the economy of the state.
The Governor said, during the inauguration of the council, that there was no economic justification for the state government to keep wasting scarce resources in maintaining moribund enterprises with obsolete machinery as the annual budgetary allocations to such enterprises would be utilized in taking care of other developmental needs of the state.
Public enterprises in the state are in a sorry state of depressing picture of inefficiency, low productivity, losses, budgetary burden and poor productivity in the services rendered.
Google defines commercialization as the process of transforming transaction into a commercial activity in which goods or services acquire monetary value. Privatization on the other hand means a private company taking over some or all operational responsibilities, compensated either through user fees or a fee-for-service paid by the government.
Privatization and Commercialization was meant to bring solution to the dwindling output of the public enterprises by offering a reduction or total withdrawal of government interferences in the economic activities of these public agencies and make them commercially viable.
This will bring about the relinquishment of part or all of the equity and other interests held by the government or its agencies. It will offer or bring about a reduction of government expenditure on economic activities and transferring such public assets, investment to the private sector of the economy for proper, better administration and management.
It is also believed that privatization will bring about economic efficiency. It will reduce the burden on the dwindling resources of the government and bring about a better rewarding system, organization and management through incentives, communication, collective bargaining and creativity.
It is long believed that private establishments are better and efficiently managed than the public ones. Therefore, privatization will increase private initiative, help to restructure the state economy, reallocate public funds to efficient users, create a self sustaining culture, attract foreign investors, among others.
The view is that privatization would greatly minimize the scope of political patronage in government’s appointments, where state revenue is largely wasted. Most people sit down to collect the money which they never worked for.