What economic transition happens when a government transforms state-run businesses into privately owned entities?

The transition that takes place when a government transforms state-run businesses into privately owned entities is known as privatization. This process involves selling public enterprises to private individuals or organizations, which is aimed at increasing efficiency, competitiveness, and profitability.

Privatization is often pursued with the belief that the private sector can manage and operate these enterprises more effectively than the government. It can lead to a more market-driven economy where competition is encouraged, potentially improving services and reducing costs for consumers.

In contrast, bankruptcy refers to a legal status for individuals or organizations that cannot repay their debts, while liquidation involves selling off assets to pay creditors. Restructuring typically refers to reorganizing the operational aspects of a business, which may or may not involve changes in ownership. In the context of transitioning businesses from state ownership to private, privatization is the most accurate term.