Politics and Privatization in Central and Eastern Europe: A Panel Data Analysis

30 Pages Posted: 27 Dec 2008 Last revised: 2 May 2010

See all articles by Christian Bjørnskov

Christian Bjørnskov

Aarhus University - Department of Economics and Business; Research Institute of Industrial Economics (IFN); Center for Political Studies; Institute for Corruption Studies

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: February 16, 2009

Abstract

This paper examines how government ideology influenced privatization in Central and Eastern Europe after the transition from socialism. We analyze a dataset of privatization indicators covering small- and large-scale industries in 19 transition countries over the 1990-2007 period and introduce an government ideology index. The results suggest that market-oriented governments promoted privatization of small-scale but less of large-scale industries. In the rapid transition process in the early 1990s, leftist governments stuck to public ownership much more strongly than in the following period from the mid 1990s to 2007. The remarkable differences between leftist and rightwing governments concerning the role of government in the economy and basic elements of political order are in line with developments in OECD countries, and may also hold further implications for transition and democratizing countries outside Central and Eastern Europe..

Keywords: Central and Eastern Europe, Ideology, Privatization, Panel Data

JEL Classification: P20, P30, C23

Suggested Citation

Bjørnskov, Christian and Potrafke, Niklas, Politics and Privatization in Central and Eastern Europe: A Panel Data Analysis (February 16, 2009). Available at SSRN: https://ssrn.com/abstract=1319730 or http://dx.doi.org/10.2139/ssrn.1319730

Christian Bjørnskov (Contact Author)

Aarhus University - Department of Economics and Business ( email )

Fuglesangs Allé 4
Aarhus V, DK-8210
Denmark

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Center for Political Studies

Landgreven 3
Copenhagen K, DK-1301
Denmark

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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