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Privatization

Full divestiture/ privatization occurs when all/ substantially all the interests of a government in an asset (such as a utility or other state owned enterprise) are transferred to the private sector.  Full privatization is distinguishable from partial privatization and joint venture arrangements between public and private parties where the public sector maintains a significant influence/ interest.

Privatization is a transaction or series of transactions reliant upon sound laws and defensible property rights. It is also a process by which governments convert state-owned businesses into corporations, undertake financial and operational restructuring to prepare enterprises for sale, define procedures to ensure transparency and fairness, and allocate proceeds.

Privatization laws provide authority to government agencies and clarify the rights of investors, both domestic and foreign, to participate. These laws are supported by elements of the wider legal framework such as corporations and capital markets laws.

This page provides analyses of legal issues arising in the course of privatization, illustrative sample privatization laws drawn from good practice and examples of enacted laws.

Resources

  • Legal Guidelines for Privatization Programs(135K PDF), Douglas Webb. This paper identifies legal issues arising in the design of privatization programs. The paper does not specifically discuss legal issues arising in small scale privatization of retailed service sectors or mass privatization programs involving distributions to the general public.
  • Sample Law on Privatization (Civil Law System) (English Version) (French Version)(233K PDF). This law is a composite of a number of examples of privatization laws enacted in civil law jurisdictions. It is not intended to be a model law, but rather to provide an illustration of possible approaches to key drafting issues in the preparation of such a law.
    Sample Law on Privatization (Common Law System) (220K PDF). This law is a composite of a number of examples of privatization laws enacted in common law jurisdictions. It is not intended to be a model law, but rather to provide an illustration of possible approaches to key drafting issues in the preparation of such a law.
  • Examples of Enacted Laws - here are links to some examples of enacted privatization laws from around the world.  This is for illustrative purposes and is not an exhaustive list.  Links to third party web sites are made for your convenience and do not imply that they are endorsed by the World Bank and its affiliates.  World Bank Group is not responsible for the content of any third party web site or any link contained in a linked site.

    French - Civil law systems
    Algeria - (Algerie) (text in French)
    Morocco - (Maroc) (texts in French)
    Tunisia - (Tunisie) (principal provisions - in French) (Other relevant legislation)

Middle East
Jordan
Oman

Central Europe
Bulgaria
Turkey
Latvia


Updated as of May 18, 2009



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