Privatization

27 Pages Posted: 26 Nov 2011 Last revised: 9 Jan 2012

J. David Brown

US Census Bureau Center for Economic Studies; IZA Institute of Labor Economics

John S. Earle

George Mason University - Schar School of Policy and Government; IZA Institute of Labor Economics

Scott Gehlbach

University of Wisconsin-Madison

Date Written: October 21, 2011

Abstract

In this paper prepared for inclusion in the Oxford Handbook of the Russian Economy (Michael Alexeev and Shlomo Weber, eds.), we replicate, update, and extend our earlier work on manufacturing enterprise privatization and productivity in Russia. Our results suggest a more nuanced view of Russian privatization than that offered by either its critics or its defenders. We confirm earlier findings that the average impact on productivity of privatization to domestic owners is around -3 to -5 percent, though some regions show productivity gains similar to those in Central Europe (an increase of 10 to 20 percent). The regional variation is strongly positively associated with the size of the regional bureaucracy. Notwithstanding the average negative effect, our updated results through 2005 (the most recent year for which comparable data are available) show a pronounced change after 2002 as the productivity effects of Russian privatization have begun to approach those seen elsewhere much earlier. Privatization became most effective west of the Urals, in areas with greater market access. Initially an outlier, by 2005 Russia appeared to be becoming more of a “normal country,” at least in the narrow sense of the impact of private ownership on firm productivity.

Suggested Citation

Brown, J. David and Earle, John S. and Gehlbach, Scott, Privatization (October 21, 2011). GMU School of Public Policy Research Paper No. 2012-03. Available at SSRN: https://ssrn.com/abstract=1962827 or http://dx.doi.org/10.2139/ssrn.1962827

J. David Brown

US Census Bureau Center for Economic Studies ( email )

4600 Silver Hill Road
Washington, DC 20233
United States
301-763-8769 (Phone)
301-763-5935 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

John S. Earle

George Mason University - Schar School of Policy and Government ( email )

3351 Fairfax Drive
MS 3B1
Arlington, VA 22201
United States
703-993-8023 (Phone)

HOME PAGE: http://earle.gmu.edu

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Scott Gehlbach (Contact Author)

University of Wisconsin-Madison ( email )

1050 Bascom Mall
Madison, WI 53706
United States
608-263-2391 (Phone)

Paper statistics

Downloads
229
Rank
106,376
Abstract Views
1,203