Traditional public sector competencies such as army, police, prisons, health, education, management of public commons (natural resources, natural resource management), water management, social and public housing, communications (transport and telephone), electrical network, energy sources (renewable energy and non-renewable energy, garbage collection, waste management and others are some of those that, depending on the countries, are subject to privatization. Sometimes only outsourcing the management but keeping the property in the hands of the State and other times selling the wholly or partially owned by national or multinational private companies or investment funds (e.g. Suez (company, 2015) in drinking water. Sometimes states abandon their powers and simply do not exercise them.[9]​[3]​[10]​.

The argument of the promoters to carry out privatizations is the improvement of the management of public companies, the reduction of costs for the State. However, the most common and logical objective of private companies is the capture of economic resources, benefits, by the private sector. The studies indicate that on many occasions the argumentative objectives are not met: there is no improvement in the operation and management of public companies after their privatization and the services offered to citizens who become clients under the monopoly of privatized services are not made cheaper or improved.[11]​[3]​[4]​.

Privatization introduces important changes in public and private roles and responsibilities. It is not necessarily limited to the sale of public companies, since privatization means reducing the degree of influence of the State, a situation that for some can lead to an attempt to dismantle the State,[12]​ and leave in the hands of private agents and the market what had previously been administered by the State. In its radical versions it is proposed that it is even possible to make private services such as the judiciary, the police, which is currently state and only[13]​ or urban planning.[14]​.

The privatization of State powers can be partial, as occurs with the capitalization "Capitalization (Bolivia)") of public companies: a portion of the shares (between 40% to 60% of the shares) are sold to private investors.

Contenido

La acción por la que un bien público pasa a ser controlado por empresas privadas. En el ámbito empresarial, se produce cuando el estado vende una empresa pública. Es desde ese momento cuando el Estado deja de ejercer el control directo sobre esa empresa vendida, de forma que no tiene ni gastos de mantenimiento ni beneficios, pues este deber lo suplen los accionistas o dueños de la empresa. El estado solo controla la actividad y recibe beneficios según lo estipulado a través de los impuestos y el marco jurídico.

First phase

The first phase for the privatization of a company is the preparation of the sale, even though the pressure of the situation can be considered one of the most important factors that affects the speed with which it is attempted to sell the company, there are also determining policy elements for the preparation of the sale. Restructuring is a preliminary step to privatization, in some cases restructuring is absolutely necessary to promote competition or facilitate sales, but restructuring has risks and raises significant problems. First, it may be a time-consuming operation, resulting in a missed opportunity to privatize. Second, it can demand important resources that the state lacks. Thirdly, it may happen that the restructuring reduces the number of potential interested parties if it does not coincide with the investment programs that the latter have.

For these reasons, it is possible to conclude that the restructuring of public companies as a prior step to their privatization should only be carried out when one of the following three conditions is met.

Restructuring for these reasons, such as the possibility of improving the final sales price of the company, implies assuming that the private sector has a greater capacity to add value than the State, this is an activity from which the state is precisely withdrawing. In this sense, it is worth saying that the same reasons that lead to privatization should lead to leaving the task of restructuring the companies to be privatized to the private sector.

Second phase

The second phase of privatization is the sales method, so far a wide range of privatization schemes or modalities have been experimented with and innovation continues in this field. Therefore, there is no fixed pattern, obviously the modality of privatization has been largely determined by the type of company or activity that is privatized, but in general, the formula that has predominated is that of the search for a strategic investor to whom a percentage of shares with control of the company are sold. Another percentage of the shares, which is usually between 4% and 20%, is sold to the workers of the privatized company and the rest is taken by the government to the capital market. This has been the scheme used in the sale of telecommunications, electrical and many other companies. We could say that this has been the predominant scheme in large companies.

The objective of obtaining a strategic investor for large companies that are privatized has clearly predominated over other policy objectives, such as the development of the capital market. In the sale of the share block to the strategic investor, public bidding has largely predominated.

This has contributed significantly to giving transparency to the privatization processes, which in turn has contributed to giving this political viability. Although various privatization processes have been a source of scandals or corruption in several Latin American countries (airlines and oil companies in Argentina, water companies in Bolivia, telephone companies in Mexico).

After having developed the scheme on the sales method, we proceed with the third step, the criteria for selecting the buyers, as with the sales method, there has not been a single method, not even within each country, to select the final buyers of the public companies to be privatized. However, it is possible to appreciate a fact and a dominant trend:

In numerous cases of privatization in Latin America, the price offered by interested investors has had a high or dominant weight in the final selection; but that has not been the only element. Some weight has also been given to the investment plans of competitors. However, in the most recent cases of privatization, the minimum investment program is defended by the government and this becomes an equal requirement for all investors. These, having already been prequalified, compete strictly on the basis of the price offered.

Stephanie Guerrero's use of a single criterion (especially price) for selecting the company's buyers has two major advantages. It greatly simplifies the selection process by referring it to a single quantifiable indicator and, therefore, gives great transparency to the process. Potential investors having been previously pre-qualified and the minimum investment plan (when applicable) having also been defined by the state, it is ensured that whoever wins among the buyers, a good decision will have been made.

Traditional public sector competencies such as army, police, prisons, health, education, management of public commons (natural resources, natural resource management), water management, social and public housing, communications (transport and telephone), electrical network, energy sources (renewable energy and non-renewable energy, garbage collection, waste management and others are some of those that, depending on the countries, are subject to privatization. Sometimes only outsourcing the management but keeping the property in the hands of the State and other times selling the wholly or partially owned by national or multinational private companies or investment funds (e.g. Suez (company, 2015) in drinking water. Sometimes states abandon their powers and simply do not exercise them.[9]​[3]​[10]​.

The argument of the promoters to carry out privatizations is the improvement of the management of public companies, the reduction of costs for the State. However, the most common and logical objective of private companies is the capture of economic resources, benefits, by the private sector. The studies indicate that on many occasions the argumentative objectives are not met: there is no improvement in the operation and management of public companies after their privatization and the services offered to citizens who become clients under the monopoly of privatized services are not made cheaper or improved.[11]​[3]​[4]​.

Privatization introduces important changes in public and private roles and responsibilities. It is not necessarily limited to the sale of public companies, since privatization means reducing the degree of influence of the State, a situation that for some can lead to an attempt to dismantle the State,[12]​ and leave in the hands of private agents and the market what had previously been administered by the State. In its radical versions it is proposed that it is even possible to make private services such as the judiciary, the police, which is currently state and only[13]​ or urban planning.[14]​.

The privatization of State powers can be partial, as occurs with the capitalization "Capitalization (Bolivia)") of public companies: a portion of the shares (between 40% to 60% of the shares) are sold to private investors.

Contenido

La acción por la que un bien público pasa a ser controlado por empresas privadas. En el ámbito empresarial, se produce cuando el estado vende una empresa pública. Es desde ese momento cuando el Estado deja de ejercer el control directo sobre esa empresa vendida, de forma que no tiene ni gastos de mantenimiento ni beneficios, pues este deber lo suplen los accionistas o dueños de la empresa. El estado solo controla la actividad y recibe beneficios según lo estipulado a través de los impuestos y el marco jurídico.

First phase

The first phase for the privatization of a company is the preparation of the sale, even though the pressure of the situation can be considered one of the most important factors that affects the speed with which it is attempted to sell the company, there are also determining policy elements for the preparation of the sale. Restructuring is a preliminary step to privatization, in some cases restructuring is absolutely necessary to promote competition or facilitate sales, but restructuring has risks and raises significant problems. First, it may be a time-consuming operation, resulting in a missed opportunity to privatize. Second, it can demand important resources that the state lacks. Thirdly, it may happen that the restructuring reduces the number of potential interested parties if it does not coincide with the investment programs that the latter have.

For these reasons, it is possible to conclude that the restructuring of public companies as a prior step to their privatization should only be carried out when one of the following three conditions is met.

Restructuring for these reasons, such as the possibility of improving the final sales price of the company, implies assuming that the private sector has a greater capacity to add value than the State, this is an activity from which the state is precisely withdrawing. In this sense, it is worth saying that the same reasons that lead to privatization should lead to leaving the task of restructuring the companies to be privatized to the private sector.

Second phase

The second phase of privatization is the sales method, so far a wide range of privatization schemes or modalities have been experimented with and innovation continues in this field. Therefore, there is no fixed pattern, obviously the modality of privatization has been largely determined by the type of company or activity that is privatized, but in general, the formula that has predominated is that of the search for a strategic investor to whom a percentage of shares with control of the company are sold. Another percentage of the shares, which is usually between 4% and 20%, is sold to the workers of the privatized company and the rest is taken by the government to the capital market. This has been the scheme used in the sale of telecommunications, electrical and many other companies. We could say that this has been the predominant scheme in large companies.

The objective of obtaining a strategic investor for large companies that are privatized has clearly predominated over other policy objectives, such as the development of the capital market. In the sale of the share block to the strategic investor, public bidding has largely predominated.

This has contributed significantly to giving transparency to the privatization processes, which in turn has contributed to giving this political viability. Although various privatization processes have been a source of scandals or corruption in several Latin American countries (airlines and oil companies in Argentina, water companies in Bolivia, telephone companies in Mexico).

After having developed the scheme on the sales method, we proceed with the third step, the criteria for selecting the buyers, as with the sales method, there has not been a single method, not even within each country, to select the final buyers of the public companies to be privatized. However, it is possible to appreciate a fact and a dominant trend:

In numerous cases of privatization in Latin America, the price offered by interested investors has had a high or dominant weight in the final selection; but that has not been the only element. Some weight has also been given to the investment plans of competitors. However, in the most recent cases of privatization, the minimum investment program is defended by the government and this becomes an equal requirement for all investors. These, having already been prequalified, compete strictly on the basis of the price offered.

Stephanie Guerrero's use of a single criterion (especially price) for selecting the company's buyers has two major advantages. It greatly simplifies the selection process by referring it to a single quantifiable indicator and, therefore, gives great transparency to the process. Potential investors having been previously pre-qualified and the minimum investment plan (when applicable) having also been defined by the state, it is ensured that whoever wins among the buyers, a good decision will have been made.