The distributional impact of privatization in developing countries: the role of democratic institutions
AbstractFocusing on developing countries which have recently experienced political and economic transitions, we study how income inequality is affected by privatization in the light of the democratization process. We find that privatization is negatively and significantly correlated with the inequality in the income distribution when, thanks to democratic institutions, the protection of the civil liberties and the guarantee of the political rights are widely ensured to all citizens. In fact, privatization generates revenue which well mature democracies can use to satisfy the redistributive pressures from the poor. Then, our evidence suggests an interesting policy implication for developing countries: only after having established mature representative political institutions, privatization can be implemented without producing a negative distributional impact.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2011-31.
Date of creation: 30 Nov 2011
Date of revision:
Gastil index; civil liberties; political rights; Gini index;
Find related papers by JEL classification:
- D30 - Microeconomics - - Distribution - - - General
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
- P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
- P50 - Economic Systems - - Comparative Economic Systems - - - General
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Badru Bukenya & Pablo Yanguas, 2013. "Building state capacity for inclusive development. The politics of public sector reform," Brooks World Poverty Institute Working Paper Series esid-025-13, BWPI, The University of Manchester.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (DEMM Working Papers) The email address of this maintainer does not seem to be valid anymore. Please ask DEMM Working Papers to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.