Privatization and Performance: A Study of the British Steel Industry under Public and Private Ownership

Abstract

Privatisation is intended to lead to a marked improvement in economic performance. Here the performance of British Steel is assessed both before and after privatisation in December 1988. Performance is measured in terms of trends in labour and total factor productivity and profitability and by comparing the technical efficiency of the UK steel industry with technical efficiency in six other major steel producing countries using data envelopment analysis (DEA). The results confirm the existence of efficiency gains before privatisation but since then performance has been more lacklustre.