This papers discusses the privatization of Telecom Italia over ten years, from divestiture to three subsequent changes of ownership control. Why has the governance of one of the most promising of the former nationalized industries been so unstable? The turn of events suggests that the evolution from public to private ownership in Italy has taken on the characteristics of a search for equilibrium in a complex game, centred around the control of rents. In crucial moments (privatization, takeovers, reorganization plans), the political system was able to choose between removing itself from the telecommunications sector, or declaring a public interest in its control. A middle path was chosen, in which the government negotiates with private interests but without a clear industrial policy. Financial operators, for their part, participate in the game in a speculative fashion, with limited means, unable to project a convincing industrial plan. This outcome was not a necessary one and, if only as a mental exercise, one can readily imagine counter-factual scenarios .
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Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number
2007-19.
Find related papers by JEL classification: L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications