Politics and Privatization in Central and Eastern Europe

30 Pages Posted: 16 Mar 2011

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: March 15, 2011

Abstract

This article examines how government ideology influenced privatization efforts in Central and Eastern Europe after the transition from socialism. We analyse a dataset of privatization indicators covering small- and large-scale industries in 19 transition countries over the period 1990-2007 and introduce a government ideology index. The results suggest that market-oriented governments promoted the privatization of small-scale industries more than that of large-scale ones. In the rapid transition process in the early 1990s, leftist governments stuck to public ownership more strongly than in the following period from the mid-1990s to 2007. The remarkable differences between leftist and right-wing governments concerning both the role of government in the economy and the 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, privatization, ideology, panel data

JEL Classification: P20, P30, G38, L33, L51, C23

Suggested Citation

Bjørnskov, Christian and Potrafke, Niklas, Politics and Privatization in Central and Eastern Europe (March 15, 2011). Economics of Transition, Vol. 19, Issue 2, pp. 201-230, 2011, Available at SSRN: https://ssrn.com/abstract=1787867 or http://dx.doi.org/10.1111/j.1468-0351.2010.00404.x

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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