The rise and fall of British state ownership - Political pressure or economic reality?

Periodic acquisitions and sales of telecommunications and railroad companies by the state in the United Kingdom can be explained with the aid of a single model. Two rival hypotheses are explored. First, successive policy changes pursued by different parties in power lead to oscillations in state ownership. Second, privatization and nationalization are political responses to stagnant industries. Although both explanations have merit, the political explanation performs better. In contrast to previous studies, the same model of reference can explain seemingly contradictory phenomena. The findings challenge several myths concerning the state's involvement in the market.