The Political Determinants of Liberalization: Do Ideological Cleavages Still Matter?
International Review of Economics, Vol. 58, No. 2, pp. 121-145, June 2010
32 Pages Posted: 24 Dec 2011
Date Written: February 1, 2010
We investigate the political determinants of liberalization in OECD network industries, performing a panel estimation over thirty years, through the largest and most updated sample available. Our results contrast with the traditional wisdom according to which right-wing governments do promote market-oriented policies more intensively than left-wing ones. Our findings reveal a neglected role of the so-called ‘neo-liberalism’ in promoting left-wing market-oriented policy. As a result, we claim that ideological cleavages ceased to act as determinants of the liberalization wave observed in network industries. This result is confirmed when controlling for the existing regulatory conditions that executives find when elected. Furthermore, we find that the country’s exposure to other countries’ policy initiatives acts as a positive stimulus for liberalization policies.
Keywords: Liberalization, Network Industries, Partisanship, Panel Data
JEL Classification: D72, L50, P16, C23
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