Who Wants to Revise Privatization? The Complementarity of Market Skills and Institutions

Abstract

Using survey data from 28 transition countries, we test for the complementarity and substitutability of market-relevant skills and institutions. We show that democracy and good governance complement market skills in transition economies. Under autocracy and weak governance institutions there is no significant difference in support for revising privatization between high and low-skilled respondents. As the level of democracy and the quality of governance increases, the difference in the level of support for revising privatization between the high and low skilled grows dramatically. This finding contributes to our understanding of microfoundations of the politics of economic reform.

Keywords: Complementarity, Perception, Privatization, Skills, Transition

JEL Classification: J2, O0, P0