Everyone Hates Privatization, but Why? Survey Evidence from 28 Post-Communist Countries

Abstract

Studies of mass support for economic reform reveal a simple conclusion: Everyone hates privatization. Yet whether respondents hold this due to material self-interest or concerns about the legitimancy or outcomes of privatization view is unclear. We test these arguments using a 2006 survey of 28,000 individuals in 28 post-communist countries and find that a lack of human capital affects support for revising privatization primarily via a preference for state property over private property; whereas transition-related hardships influence support for revising privatization due to both a preference for state property and concerns about the legitimacy of privatization. These results suggest the value of analyses that not only link respondent traits with support for policy, but that also probe the motivations that underpin this support. They also indicate that opposition to privatization should not be equated with support for renationalization.

Keywords: privatization, revision, nationalization, property rights, demand for property rights, legitimacy of property rights, transition

JEL Classification: P26