The Political Economy of Privatization
Università di Torino
Bocconi University - BAFFI - Paolo Baffi Centre on Central Banking and Financial Regulation
FEEM Working Paper No. 45.2003
This paper provides an empirical analysis of the role of political institutions in privatization. Using panel data for 21 industrialized countries in the 1977-1999 period, first we show that the timing and extent of privatization is affected by political fragmentation and proportional elections. As theory predicts, in consensual democracies large-scale privatization appears to be delayed by a war of attrition among different veto players. Second, privatization seems strongly affected by partisan politics. Particularly, right-wing executives with re-election concerns design privatization to spread share ownership among domestic voters.
Number of Pages in PDF File: 57
Keywords: Keywords: Political Institutions, Partisan Politics, Privatization
JEL Classification: D72, D78, L33working papers series
Date posted: July 21, 2003
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