Final answer:
Privatization is the process of transferring government-owned businesses to the private sector, which is true when transitioning from a command economy to a market economy. It can lead to increased efficiency but also social hardships. The privatization process is part of economic reforms promoting more interconnected and efficient global economies.
Step-by-step explanation:
True. Privatization is indeed the process by which countries with a command economy transition towards a market economy. This entails moving ownership of government-operated businesses to private entities, aiming to enhance economic efficiency and productivity. However, it's important to note that this transformation can be difficult and may lead to various social and economic hardships, such as income inequality, corruption, and instability. Countries pursue privatization to participate more effectively in the increasingly interconnected global economic system, regardless of these challenges.
Some countries, like India, have undergone successful privatization, moving away from a mixed economy with substantial government intervention to a more liberal economic model. Organizations such as the World Bank and the International Monetary Fund have promoted privatization to reduce inefficiencies in public services.
The transformation from a command to a market economy is complex, and no economy is purely one or the other. Economies usually possess characteristics of both types, and the decision to privatize is balanced between the goals of economic efficiency and social equity.