nationalization

Nationalization is the transfer of ownership and control of an industry or assets from the private sector to the government. It is typically carried out through legislation, expropriation, or other state actions and may involve compensation, though terms vary by country and case. It is distinct from privatization, which moves assets from public to private ownership, and from nationalization without compensation, which some observers describe as confiscation or expropriation.

Purposes of nationalization include securing essential services, protecting strategic resources, promoting social welfare, stabilizing the economy, or pursuing broader industrial or developmental goals. Nationalized enterprises may be fully state-owned or operated as state-controlled entities, often under public oversight or with coordination through regulators or public-private partnerships.

Economic effects are debated. Proponents argue that nationalization can improve access to services, reduce price volatility, and align assets with long-term public objectives. Critics contend that it can reduce efficiency and innovation, deter private investment, and create fiscal or debt burdens for the government, depending on how compensation is handled and how enterprises are governed. The outcomes depend on governance, regulatory structures, and the broader economic environment.

Historical and regional patterns vary. In the mid-20th century, many Western countries nationalized coal, steel, railways, and utilities. Other cases involve nationalizing oil, gas, or water resources, or sectors like telecommunications. In recent decades, many governments pursue a mixed approach—maintaining state involvement in strategic sectors while promoting competition and private investment through regulation and partnerships.

See also: expropriation, eminent domain, privatization, sovereign wealth fund.