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Privatization : trends and recent developments

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  • Kikeri, Sunita
  • Kolo, Aishetu
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    Abstract

    This paper takes stock of recent privatization trends, examines the extent to which government ownership is still prevalent in developing countries, and summarizes emerging issues for state enterprise reform going forward. Between 1990 and 2003, 120 developing countries carried out nearly 8,000 privatization transactions and raised $410 billion in privatization revenues. Privatization activity peaked in 1997 and dropped off in the late 1990s and, while still at overall low levels, is slowly creeping back. While there are a large number of studies assessing the impact of privatization on enterprise performance and overall welfare, there are no systematic data on the extent to which privatization has changed the role of state enterprises in the economy. Anecdotal evidence suggests that the state's role has been substantially reduced in Eastern and Central Europe and in certain countries in Latin America. But available evidence also suggests that, despite a long track record of privatization, government ownership in state enterprises is still widely prevalent in some regions and countries, and in certain sectors in virtually all regions.The paper shows that the costs of not reforming state enterprises are high and that continued efforts need to be made to improve their performance by improving privatization policies and institutions; adopting more of a case-by-case approach for complex sectors and countries; and exposing state enterprises to market discipline through new private entry and exit of unviable firms and improvements in their corporate governance.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3765.

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    Date of creation: 01 Nov 2005
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    Handle: RePEc:wbk:wbrwps:3765

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    Related research

    Keywords: Banks&Banking Reform; Privatization; Municipal Financial Management; State Owned Enterprise Reform; Private Participation in Infrastructure;

    This paper has been announced in the following NEP Reports:

    References

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    1. Michael Andrews, 2005. "State-Owned Banks, Stability, Privatization, and Growth," IMF Working Papers 05/10, International Monetary Fund.
    2. Briceno-Garmendia, Cecilia & Estache, Antonio & Shafik, Nemat, 2004. "Infrastructure services in developing countries : access, quality, costs and policy reform," Policy Research Working Paper Series 3468, The World Bank.
    3. Beck, H.T.L. & Cull, R. & Jerome, A., 2005. "Bank privatization and performance: Empirical evidence from Nigeria," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125503, Tilburg University.
    4. John Nellis, 2003. "Privatization in Latin America," Working Papers 31, Center for Global Development.
    5. Sunita Kikeri, 2004. "An Assessment of Privatization," World Bank Research Observer, World Bank Group, vol. 19(1), pages 87-118.
    6. Antonio Estache, 2006. "PPI Partnerships vs. PPI Divorces in LDCs," Review of Industrial Organization, Springer, vol. 29(1), pages 3-26, September.
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    Cited by:
    1. Auriol, Emmanuelle & Blanc, Aymeric, 2008. "Capture and Corruption in Public Utilities: the Cases of Water and Electricity in Sub-Saharan Africa," IDEI Working Papers 505, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. Mukherjee, Arijit & Suetrong, Kullapat, 2009. "Privatization, strategic foreign direct investment and host-country welfare," European Economic Review, Elsevier, vol. 53(7), pages 775-785, October.
    3. Yuko Kinoshita & Nauro F. Campos, 2008. "Foreign Direct Investment and Structural Reforms," IMF Working Papers 08/26, International Monetary Fund.
    4. Dean Neu & Jeff Everett & Abu Shiraz Rahaman, 2009. "Accounting assemblages, desire, and the body without organs: A case study of international development lending in Latin America," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 22(3), pages 319-350, April.
    5. Qi Quan & Nancy Huyghebaert, 2005. "Share Issuing Privatizations in China: Determinants of Public Share Allocation and Underpricing," LICOS Discussion Papers 16205, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    6. Kosovka Ognjenović, 2011. "Wage Differences between the Private and the Public Sector in Serbia: Some Evidence from Survey Data," wiiw Balkan Observatory Working Papers 91, The Vienna Institute for International Economic Studies, wiiw.
    7. repec:wii:bpaper:bowp:091 is not listed on IDEAS

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