Nationalization &; Expropriation
Nationalization is defined as the concept of a government seizing the private property of foreign nationals. In other words, nationalization is the alteration or assumption of control or ownership of private property by the state. It is historically a more recent development and differs in motive and degree from “expropriation” or “eminent domain,” which is the right of government to take property for particular public purposes (such as the construction of roads, reservoirs, or hospitals), normally accompanied by the payment of compensation. Nationalization may occur through the transfer of a company’s assets to the state or through the transfer of the share capital, leaving the company in existence to carry on its business under state control.
Nationalization has often accompanied the implementation of communist or socialist theories of government, history tells us, as was the case in the transfer of industrial, banking, and insurance enterprises to the state in Russia after 1918. More recently, a further impetus has been resentment of foreign control over industries upon which the state may be largely dependent, as in the nationalization of the oil industries in Mexico in 1938 and Iran in 1951, and in the nationalization of foreign businesses in Cuba in 1960. In my view, another motivating factor for recent nationalizations may be the belief in some developing countries that state control of various industrial operations is at least temporarily necessary because of the lack of a developed capital market or supply of entrepreneurs in the domestic private sector.
Venezuela and Bolivia’s political uncertainty and a recent history of actual and threatened nationalizations, and increasing state intervention in the private sector has created a debate in the international scene. There a many talks about whether or not these actions by