Innovation, Privatization and the Public Interest
“Technology enables policies to be implemented. The reverse is also true: technology development responds to policy demands.” — Andrew Pickford
We hope you enjoy this Wednesday’s Governance Gauge: for more reading material, you can always visit our reading list for more on governance, special economic zones, best practices and studies!
This book from the Hayek Institut is the product of the international BMVIT conference, which investigated privatization and public-private partnerships under the lens of Austrian Economics.
The book opens with fundamental questionings by Anthony de Jasay about collective conflicts and how to solve them. While political decision making is an alternative, there are important aspects which simple majorities cannot account for. He then argues for a framework of spontaneous order as a better societal alternative.
Before going into the topic of privatization proper, Karen Horn discusses about the press of privatization, and how negative media can make these projects inviable. It was found that, while in some cases it is academic opposition that leads to bad press, some sectors are deemed as more “necessary” than others by the public, those also display higher resistance to privatization. Lastly, the author perceives that lack of information about failed privatizations gives the word a bad reputation, since in many times the failure was not necessarily because of privatization, but due to a specific model or inefficient regulation. To avoid this, it is recommended to make information available to the public and journalists in a way that is easy to understand.
The following chapters are on privatization proper, delving deep into the examples of railroad, street, and highway privatizations and PPPs. The historical development of these systems is explored, originating in the private sector, going into public hands and recently facing increasing liberalization.
Funding and management mechanisms for these services is also a topic of discussion, as well as the emerging role for the private sector. For example, there are different ways in which railroads can be privatized: the EU Regime says that operations must be separated from control, while a “vertical” model would have both functions being performed by the same entity. The latter is seen by author Karl Ziebarth as more responsive to price signals.
Lastly, the book deals with technological improvement. First, Hans Hinterhuber presents the six key factors to innovation management strategies, which any industry must keep in mind. These are Strategic Positioning, Customer Orientation, Functional Coordination, Network Integration, Corporate Culture and Leadership.
The last two chapters discuss different intelligent technologies for traffic and transport systems, such as info mobility and multi-standards that enable interoperability with different networks, and how increased internet penetration provides opportunities for economic growth.
The book is split into 10 chapters, in which the authors explore various topics regarding privatization and innovation with a focus on the European and Austrian markets.
Creators of zones and societies will learn in chapters 7 to 10 about innovation management, the advancement of privatization and innovation and about the use of intelligent technologies in transport and traffic.
Policymakers and analysts can take a look at chapters 3 to 6 to learn about chances, risks, failures, successes and existing practices of land transport privatization.
Scholars and experts are advised to look at chapters 1 and 2 to understand press coverage of privatization and how interest conflicts regarding these initiatives can be resolved.
The book can be found here.
Written by: Francisco Litvay
