This paper provides an empirical analysis of the role of political institutions in privatization. The empirical testing relies on a new political database with continuous and time-varying measures of the political-institutional setting, and of the partisan orientation of the executive. Using panel data for 21 industrialized countries in the 1977-1999 period, first we show the likelihood and the extent of privatization to be strongly and positively associated with majoritarian political systems. On the contrary, in consensual democracies privatization seems delayed by a “war of attrition” among different political actors. Second, we identify a partisan determinant of the choice of the privatization method. As theory predicts, right wing executives with re-election concerns design privatization to spread share ownership among domestic voters.
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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number
2003.45.
Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
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Marco Pagano & Paolo Volpin, 2001.
"The Political Economy of Finance,"
CSEF Working Papers
76, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Bernardo Bortolotti & Mara Faccio, 2004.
"Reluctant Privatization,"
Working Papers
2004.130, Fondazione Eni Enrico Mattei.
[Downloadable!]
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Bortolotti, Bernardo & Faccio, Mara, 2006.
"Reluctant privatization,"
CEI Working Paper Series
2006-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
[Downloadable!]