THE GREAT DIVESTITURE

THE GREAT DIVESTITURE

EVALUATING THE WELFARE IMPACT OF THE BRITISH PRIVATIZATIONS 1979-1997

The Mit Press, 2004

 

Book Reviews

  • Much the same applies to telecommunications and water.   The most authoritative analysis of privatisation in Britain – The Great Divestiture: Evaluating the Welfare Impactof the British Privatisations 1979-97, by Massimo Florio – utterly destroys the myth that privatisation has led to any long-term gains in productivity or efficiency, and documents the major costs in terms of welfare and communal benefit.   In addition there has been a key loss of strategic control.   Previously, during the high growth of the post-war years (1948-73), R&D investment in energy, transport and telecommunications has positive feedback on manufacturing.   Over the last 30 years however the sharp decline in British R&D has cumulatively weakened the UK industrial effort. Michael Meacher MP

 

  • “The book takes many of the supposed truths and demolishes them one by one”. – Larry Elliott –  The Guardian

 

  •    “This book should be applauded for its depth, breath, historical scope, preparedness to combine methods and data types where advantageous, and for its determination not to oversimplify an obviously complex issue. It provides an excellent resource for different types of readers and should have a wide audience.” – Andrew Mearman, University of the West of England – Economic Issues 

 

  •  “In this excellent book, Massimo Florio, Professor of Public Economics at the University of Milan, carefully assesses the impact of Britain’s privatisation programme under the Conservative governments of Margaret Thatcher and John Major, the largest experiment of its kind in any capitalist country”. – Will Podmore – Tribune magazine “What the Tory programme of privatisation really did to Britain” (May 5, 2009)

 

  • “There is much to admire in this important book. Florio presents the first comprehensive analysis of the single most important national privatization program to date.” – William L. Megginson, University of Oklahoma – Journal of Economic Literature.

 

  • “Starting from the viewpoint that the continental social model has virtues (Florio is a professor at the University of Milan and a European Commission advisor), it sees the privatization process as a regrettable consequence of British managers’ and politicians’ failure to create a perception of the valuable social purpose of their state enterprises, akin to that alleged to have been created in Britain for the NHS or on the continent for ENEL or Electricité de France” – Leslie Hannah, University of Tokyo – Business History.

 

  • “Florio (Univ. of Milan) not only pulls together recent studies that evaluate the impact of this divestiture program but also carries the analysis forward. His nuanced approach in this superbly convincing monograph skewers the myth of divestiture’s success”. – J. Prager, New York University – Choice (May 2005) Vol. 42, N. 09. 

 

  • “Un treno in corsa e la scia sfuocata delle sue luci. (Probabile) prossima stazione: Hatfield. E’ questa l’immagine forte che Florio sceglie per la copertina del suo Great Divestiture per simboleggiare le privatizzazioni inglesi. Indubbiamente le scelte grafiche sono coerenti con la tesi principale del libro. Il libro di Florio rappresenta un contributo originale e importante nella letteratura economica sulle privatizzazioni. Il suo bilancio del processo inglese, in larga parte basato su analisi quantitative originali, merita di essere letto con attenzione soprattutto poiché presenta elementi di forte discontinuità rispetto alla maggior parte dei contributi precedenti.” – Bernardo Bortolotti, Università degli Studi di Torino e FEEM Milano –

     Rivista di Politica Economica.

  • “Florio holds the Jean Monnet Chair in the Economics of European Integration at Milan University. Such as an academic title might deter some readers from proceeding, but his research findings merit close attention. As a Visiting Professor at the LSE, Florio was able to collect a vast array of research material for this book. However, he can hardly be described as a fan of the UK privatization process, first triggered by the Labour government in 1976 when it was obliged by the IMF to sell shares in BP to raise some desperately needed cash.” – Keyth Boyfield, Keyth Boyfield Associates – Economic Affairs (June 2005, Vol, 25 (2): 59)

 

  • “Florio has written a detailed study of just about every economic aspect of British privatization under Thatcher and major that anyone could think of. It should be clear that is a work by an author whose range extends economics into broader aspects of policy. The book is challenging and thought-provoking, and I hope it will be widely read.” – MartinCave, Economica (Febraury 2006, Vol. 73(289): 165)

 

  • “Sometimes, it takes an outsider to clearly see how a topic of national importance might be tackled in a comprehensive way. This is the key strength of Massimo Florio’s impressive text on UK privatization. Most British-based researchers who witnessed the Conservative privatization programme have only seen fit to anlyse parts of the programme: either looking at it thematically (e. g. its impact on share prioces) or from the perspective of a single industry (e. g. telecoms). Florio, on the other hand, looks at the public enterprice divestiture programme as a whole and attempts to analyse its effects on firms, shareholders, employees, consumers and tax payers.” – Michael G. Pollitt, University ofCambridge – British Journal of Industrial Relations (June 2005, p. 544)

 

  • “Sinora nessuno si era preso l’onore di analizzare l’impatto in modo strutturale della stagione delle privatizzazioni, della Grande vendita decisa e attuata dal governo britannico: lo ha fatto Massimo Florio, professore di scienza delle finanze dell’Università degli Studi di Milano. Per dieci anni ha analizzato l’impatto del programma di privatizzazioni e lo scorso anno ha pubblicato per la Mit Press un volume che è già diventato un best seller negli ambienti accademici e che ha ricevuto ampio risalto sulla stampa anglosassone.” Andrea di Stefano, Valori (March 2005; Year 5, n. 27:18)

 

  • “Florio ritiene che nel caso della Gran Bretagna ci sia stata una collusione tra azionisti, manager delle imprese privatizzate e agenzie di regolamentazione che ha garantito a imprese come British Telecom profitti di monopolio senza fornire un incentivo efficace a ridurre i costi.” Giorgio Barba Navaretti, Università degli Studi di Milano – Il Sole 24 Ore  (November 14, 2004, N. 315, pag 32)

 

  • “Che cosa giustifica tanto interesse attorno al lavoro di Florio, che è uno studioso non nuovo ad indagini approfondite sugli effetti di benessere delle politiche pubbliche? Si tratta del metodo e dei risultati.” Bruno Bosco, Università di Milano – Bicocca Il Manifesto (November 5, 2004, N. 13)

 

  • “The analysis conducted by this distinguished academic is so important that is ought to be made compulsory reading for every member of Tony Blair’s Government. The Prime Minister himself might find it useful to glance through the concluding chapter entitled A State without Ownership. It might – just might – help him to put a different perspective on the “miracle” of the Thatcher years. – Geoffrey Goodman, Tribune (September 24, 2004, p. 33)

 

  • “In all, the book is highly recommended and serves a needed reminder – that just because something is said frequently, it does not make true.” – Sam Williams,  The Business Economist, Vol. 35, N. 3, pp. 53-54.

 

  • “Hitherto, one could not find the results of privatisation so systematically understood and presented”. – G. Ambrosius,University of Siegen Germany, Journal of Economics, August 2005

 

Endorsements

 

  • “Massimo Florio has produced the most thorough quantitative analysis to date of how British privatizations affected investors, consumers employees, and government finances. His results are persuasive and in many ways surprising. Anyone with an interest in past or future privatizations should take notice” – Martin Cave, Warwick University
  • A view has developed that privatization process formed a watershed in U. K. economic and political development. This book gathers an impressive range or evidence to test the economic reality behind this perspective. The stripping bare of the political rhetoric with clinical economic analysis makes for fascinating reading, and the book’s conclusions have much to contribute to ongoing policy debates. Very highly recommended” – Gareth D. Myles, Professor and Head, Department of Economics, University of Exeter
  • In the current climate, when the World bank is totally committed to privatization and the European Union to liberalization of markets, a critical, in-depth evaluation of the British privatization program is long overdue Florio’s book is impressive in its analytical foundations and empirical content. Some major features of British privatizations are brought out clearly: the under pricing of assets, the huge decline in the public net worth, the large rise in management turnover. An important message is that privatization (as opposed to deregulation) made little difference to long-term trends in productivity and prices. These are controversial findings that will be of great interest to all students of privatization”. – Robert Millward, Professor of Economic History, University of Manchester
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