What are the three types of privatization?

The correct answer identifies the three specific types of privatization as divestiture, service contracting, and franchising.

Divestiture refers to the process where the government sells or liquidates its assets or operations, transferring ownership to the private sector entirely. This often involves selling off state-owned enterprises or public utilities to improve efficiency and reduce public spending.

Service contracting involves the government entering into agreements with private companies to deliver specific services. This arrangement allows the government to leverage the expertise and efficiencies of the private sector while maintaining overall control and regulatory oversight.

Franchising, in the context of privatization, refers to granting a private entity the right to operate a service or business under specific conditions set by a government entity. This model allows for private innovation and operational efficiency while keeping the ultimate accountability for service quality.

The other options do not accurately represent the three main types of privatization as they include different concepts or focus on aspects that are not directly related to the transfer of ownership or operational management from the public to the private sector.