The Efficiency of Public versus Private Firms, the Case of Australia's Two Airlines

E EN if the organizational goals are the same, there is at least one major reason why a publicly owned facility will be operated differently from a privately owned firm. A public owner is unable to sell or exchange property rights to his share of public ownership whereas a private owner may at some price either buy or sell ownership rights to private property.? Public ownership is held by all of the taxpayers within a political jurisdiction. There is no way for a member of the state to divest himself of public ownership.2 Public ownership is not voluntary. Unlike a private owner, a citizen is compelled to be a public owner. What, if any, are the implications of the ability to transfer ownership in the private sector whereas ownership is not transferable in the public sector? Professor A. A. Alchian notes two important points.3 First, with private ownership the rewards and costs of an activity are more directly concentrated on each individual responsible for them. The more of his own wealth an individual engages in a given economic activity, ceteris paribus, the larger