DEFINITION of 'Nationalization'

Refers to the process of a government taking control of a company or industry, which can occur for a variety of reasons. When nationalization occurs, the former owners of the companies may or may not be compensated for their loss in net worth and potential income.

Nationalization is most common in developing countries subject to frequent leadership and regime changes. In these instances, nationalization is often a way for a government to expand its economic resources and power.

The opposite of nationalization is privatization, when government-owned companies are spun off into the private business sector.

BREAKING DOWN 'Nationalization'

In the United States, true nationalization is a rare occurrence. The last true nationalization of an industry was the government takeover of airport security after the September 11th tragedies in 2001. Prior to that, there were some selective nationalizations of savings and loan institutions in the early 1980s, as well as much of the railroad industry in the 1970s.

Many have argued that the government takeover of a number of failing companies, such as GM and AIG, has also amounted to nationalization, even though the U.S. government exerts very little control over these companies.

  1. Denationalization

    The act of changing a government-run firm into a private-sector ...
  2. Condemnation

    The seizure of a property by a public authority for a public ...
  3. Renationalization

    Bringing assets and/or industries back into national-government ...
  4. Expropriation

    The act of taking of privately owned property by a government ...
  5. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
  6. Privatization

    1. The transfer of ownership of property or businesses from a ...
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