Nationalization (or nationalisation) is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state.[1] Nationalization usually refers to private assets or assets owned by lower levels of government, such as municipalities, being transferred to the state. The opposites of nationalization are privatization and demutualization. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone renationalization. Industries that are usually subject to nationalization include transport, communications, energy, banking, and natural resources.

Nationalization may occur with or without compensation to the former owners. Nationalization is distinguished from property redistribution in that the government retains control of nationalized property. Some nationalizations take place when a government seizes property acquired illegally. For example, in 1945 the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.[2]

Nationalization is to be distinguished from "socialization", which refers to the process of restructuring the economic framework, organizational structure, and institutions of an economy on a socialist basis. By contrast, nationalization does not necessarily imply social ownership and the restructuring of the economic system. By itself, nationalization has nothing to do with socialism, having been historically carried out for various different purposes under a wide variety of different political systems and economic systems.[3] However, nationalization is, in most cases, opposed by laissez faire capitalists as it is perceived as excessive government interference in, and control of, economic affairs of individual citizens.


Since nationalized industries are state owned, the government is responsible for meeting any debts. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing. If they are profitable, the profit is often used to finance other state services, such as social programs and government research, which can help lower the tax burden.

The traditional Western stance on compensation was expressed by United States Secretary of State Cordell Hull during the Mexican nationalization of the petroleum industry in 1938, saying that compensation should be "prompt, effective and adequate". According to this view, the nationalizing state is obligated under international law to pay the deprived party the full value of the property taken.

The opposing position has been taken mainly by developing countries, claiming that the question of compensation should be left entirely up to the sovereign state, in line with the Calvo Doctrine.

Socialist states have held that no compensation is due, based on the view that private ownership over socialized assets is illegitimate, exploitative, or a hindrance to further economic development.

In 1962, the United Nations General Assembly adopted Resolution 1803, "Permanent Sovereignty over National Resources", which states that in the event of nationalization, the owner "shall be paid appropriate compensation in accordance with international law". In doing so, the UN rejected the traditional Calvo-doctrinal view and the Communist view. The term "appropriate compensation" represents a compromise between the traditional views, taking into account the need of developing countries to pursue reform, even without the ability to pay full compensation, and the Western concern for the protection of private property.

In the United States, the Fifth Amendment requires just compensation if private property is taken for public use.

Other Languages
العربية: تأميم
asturianu: Estatización
azərbaycanca: Milliləşdirmə
беларуская: Нацыяналізацыя
беларуская (тарашкевіца)‎: Нацыяналізацыя
български: Национализация
català: Estatització
čeština: Znárodnění
Cymraeg: Gwladoli
Ελληνικά: Κρατικοποίηση
español: Estatización
Esperanto: Ŝtatigo
فارسی: ملی‌سازی
français: Nationalisation
한국어: 국유화
հայերեն: Ազգայնացում
hrvatski: Nacionalizacija
Bahasa Indonesia: Nasionalisasi
עברית: הלאמה
latviešu: Nacionalizācija
lietuvių: Nacionalizacija
مصرى: تأميم
Bahasa Melayu: Pemiliknegaraan
Nederlands: Nationalisering
日本語: 国有化
norsk nynorsk: Nasjonalisering
Piemontèis: Nassionalisassion
português: Nacionalização
română: Naționalizare
Simple English: Nationalization
slovenčina: Znárodnenie
slovenščina: Nacionalizacija
српски / srpski: Национализација
srpskohrvatski / српскохрватски: Nacionalizacija
Türkçe: Millîleştirme
українська: Націоналізація
اردو: قومیانا
Tiếng Việt: Quốc hữu hóa
中文: 國有化