The welfare impact of a privatisation: the British Telecom case-history

The evaluation of a large scale public divestiture should be carried out using the tools of applied welfare economics. Nevertheless a comprehensive evaluation of the British experience with these instruments is beyond our possibilities, since it requires detailed microdata that are not available to the single researcher. However, here, by way of an example, we shall look at the privatisation of British telecommunications in the perspective of its welfare impact. What we are interested in is mainly how to learn from a case-history. We are not able to carry out a complete survey of all that has been written about the restructuring of telecommunications in the UK and elsewhere. We are, however, interested in seeing whether from an examination of this case – which was definitely the most important of the British privatization programmes – we are capable of arriving at considerations of more general interest about the impact of privatisations.