Privatization in Development: Some Lessons from Experience

34 Pages Posted: 20 Apr 2016

Date Written: November 1, 2009

Abstract

This paper briefly reviews the main theories of state versus private ownership and empirical evidence on the impact of privatization in developing countries (including transition economies). The paper draws some lessons for policy and offers some suggestions on how to assess privatization, at least in countries where there is still scope for it. The paper suggests that although understanding of the efficiency gains of privatization has increased significantly in recent years, there is an important area about which little is known: the distributional effects of privatization. Whether arguing from the standpoint of welfare economics or political economy, distributional effects are critical to the outcome, or the perceived outcome, of privatization. Thus, there is a need to fully evaluate the ex ante and ex post impacts of privatization, the most effective types of regulation and ownership regimes, and the way in which losers, when there are any, can be compensated. This is a need that must be met by academics and development agencies, including the World Bank and regional development banks.

Keywords: Banks & Banking Reform, Privatization, Emerging Markets, Infrastructure Regulation, Bankruptcy and Resolution of Financial Distress

Suggested Citation

Bourguignon, Fran├žois and Sepulveda, Claudia, Privatization in Development: Some Lessons from Experience (November 1, 2009). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2009. Available at SSRN: https://ssrn.com/abstract=1509198

Fran├žois Bourguignon (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Claudia Sepulveda

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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