Privatization as a Mean to Organizational Performance: Some Theoretical Reasons and Empirical Results about Privatizations Policies in West Africa

Abstract:     
Any physicist and even any schoolchild knows that a body in motion finds in itself, by frictions which it generates, the proper limits of its movement, and the phenomenon of the privatization of public companies in West Africa today does not escape this logic. During the last decades, the requirements of an increasingly complex environment in perpetual change and the challenges posed by development, economic globalization, the fight against poverty as well as requirements for the protection of health and for the development of infrastructure in a context of rarefaction of the resources, led many African States, under the aegis of the World Bank and the International Monetary Fund, to disengage the State in favour of private companies, considered to be more productive at lower cost than the public company. If the neo-liberal theorists and lackeys of the private sector considered the public organizations in West Africa to be schizophrenic organizations which inhibited their own possibilities of development and of endogenous dynamics, from whence came the pressing need to reform them, it is necessary to wonder, after several long decades of privatization, if the benefits and the effective achievements of the transfers of property of the public sector to the private sector has met the promises.

This paper examines, from a sample of 51 privatized companies, the impact of the policies of privatization on the performance of public organizations in West Africa and concludes that privatization yields only very limited results. It also shows that privatization is not always an efficient answer and that it is far from being the efficient tool for reforming public organizations, being unable to avoid the failure of the public sector and break managerial inertias which characterize them. Consequently, the simplifying assumption of increase in the performance of public organizations induced by privatization must be moderate.

Keywords: Privatization, Organizational Performance, Economic reforms, West Africa

JEL Classification: G32, G38, L20, M21, L32, L33, O55

working papers series