nationalizations

Nationalization is the transfer of ownership and control of private assets or industries to the government. It typically results in the creation of state-owned enterprises or public ownership of vital sectors. Nationalization is distinct from expropriation, which is the compulsory seizure of property, often with compensation, and from regulatory measures that restrict private activity without changing ownership.

Forms include direct nationalization through legislation or executive decree, as well as partial or strategic nationalization in which the state acquires a controlling stake while some private interest remains. In some cases, governments use renationalization after periods of privatization or adopt functional nationalization that concentrates control over specific activities rather than entire firms.

Motivations commonly cited are ensuring the provision of essential services, protecting strategic resources, correcting market failures, promoting social equity and employment, and pursuing broader industrial or regional development goals, sometimes framed as resource nationalism.

The process typically involves a legal framework, valuation of assets, and compensation. International practice often emphasizes prompt, adequate and effective compensation, though practices vary and disputes may be resolved domestically or through international arbitration.

Economic effects are debated. Proponents argue nationalization can improve access, lower prices, and enable economies of scale. Critics warn of reduced incentives for investment, efficiency losses, political interference, and fiscal burdens that can undermine public finances without sound governance and clear long-term objectives.

Historically, major nationalizations occurred in the mid-20th century: the United Kingdom nationalized coal, railways and steel in 1947–1948; Mexico nationalized its oil industry in 1938, creating Pemex. Nationalization remains a tool used in various countries during crises or reform, with examples in utilities, energy and transport sectors, alongside privatization and public-private partnerships.