The Political Economy of Privatization

57 Pages Posted: 21 Jul 2003

See all articles by Bernardo Bortolotti

Bernardo Bortolotti

Bocconi University; University of Turin

Paolo Pinotti

Bocconi University - BAFFI Center on International Markets, Money, and Regulation

Date Written: June 2003

Abstract

This paper provides an empirical analysis of the role of political institutions in privatization. Using panel data for 21 industrialized countries in the 1977-1999 period, first we show that the timing and extent of privatization is affected by political fragmentation and proportional elections. As theory predicts, in consensual democracies large-scale privatization appears to be delayed by a war of attrition among different veto players. Second, privatization seems strongly affected by partisan politics. Particularly, right-wing executives with re-election concerns design privatization to spread share ownership among domestic voters.

Keywords: Keywords: Political Institutions, Partisan Politics, Privatization

JEL Classification: D72, D78, L33

Suggested Citation

Bortolotti, Bernardo and Pinotti, Paolo, The Political Economy of Privatization (June 2003). FEEM Working Paper No. 45.2003. Available at SSRN: https://ssrn.com/abstract=418020 or http://dx.doi.org/10.2139/ssrn.418020

Bernardo Bortolotti (Contact Author)

Bocconi University ( email )

Via Sarfatti 25
Milan, MI 20136
Italy

University of Turin

Via Po 53
Torino, Turin - Piedmont 10100
Italy

Paolo Pinotti

Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )

Milano, 20136
Italy

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