Books
2004

The Challenges of Privatization : an International Analysis


Type: International
Authors: Bernardo Bortolotti, Domenico Siniscalco
Publisher: Oxford University Press
Date: 2004

Abstract

From 1977 to 2001, more than 3,535 privatization operations have been carried out in more than 100 countries, bringing governments revenues of over 1,127 billion dollars. The phenomenon, which has grown exponentially at the end of the 1990s and then abruptly slowed down, had dramatic consequences on the performance of state-owned enterprises, and systemic effects in industrialized countries, as well as emerging and less developed economies. Yet there have been surprisingly few attempts to provide a systematic empirical account of the privatization process at the world wide level. Why do governments privatize? Why do some countries accomplish large scale privatization programs, and others never privatize at all? Is privatization a trend or a cycle? Furthermore, how do governments privatize? Do governments really transfer ownership and control of state-owned enterprises or does private ownership tend to coexist with public control? This book provides some answers to these important questions trying to test research hypotheses set forth by the recent economic theory of privatization. The comprehensive cross country empirical analyses over a period of more than twenty years carried out in the book show that privatization has taken place all over the world, sometimes spontaneously, more often under the pressure of economic and budgetary constraints. Several goals have been met, but despite proclamations and programs, only a small minority of countries has carried out a genuine privatization process, completely transferring ownership and control of state-owned enterprises to the private sector. At the root of this reluctance there is undoubtedly some lack of political will. However this reluctance can be traced back partly to structural factors that would make an orderly privatization difficult, such as the absence of developed capital markets, appropriate regulation, and suitable institutions.

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