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Privatizing the Public Business Sector in the Eighties: Economic Performance, Partisan Responses and Divided Governments

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  • BOIX, CARLES

Abstract

From the late 1970s on, after several decades characterized by relatively interventionist patterns of economic policy making, most advanced states began questioning and, in some instances, abandoning active industrial policies and privatizing public businesses. Examining the evolution of the public business sector in all nations included in the Organization for Economic Co-operation and Development (OECD) from 1979 to 1993, this article shows that the sale of public firms did not mechanically derive from either declining growth rates, growing budget deficits or the increasing internationalization of domestic economies. Although the economic slowdown of the 1970s had the effect of breaking down the so-called Keynesian post-war consensus, the strategies towards the public business sector eventually adopted were shaped by the partisan composition of office – conservatives privatized while social democrats opted for the status quo – and by the internal structure of the cabinet – divided governments produced little change in either direction. From a theoretical point of view, this analysis broadens the current political-economic literature by showing that, although parties have a limited impact on the standard macroeconomic policies employed to manage the business cycle – a point widely confirmed in the literature – they do play a central role in designing policies, such as the level of public ownership of the business sector, that shape the supply side of the economy.

Suggested Citation

  • Boix, Carles, 1997. "Privatizing the Public Business Sector in the Eighties: Economic Performance, Partisan Responses and Divided Governments," British Journal of Political Science, Cambridge University Press, vol. 27(4), pages 473-496, October.
  • Handle: RePEc:cup:bjposi:v:27:y:1997:i:04:p:473-496_00
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    Cited by:

    1. Hicks, Timothy, 2017. "Partisan Governance and Policy Implementation: The Politics of Academy Conversion Amongst English Schools," SocArXiv 8fhvq, Center for Open Science.
    2. Belke, Ansgar H. & Baumgärtner, Frank & Schneider, Friedrich & Setzer, Ralph, 2005. "The Different Extent of Privatisation Proceeds in EU Countries: A Preliminary Explanation Using a Public Choice Approach," IZA Discussion Papers 1741, Institute of Labor Economics (IZA).
    3. Ashworth, John & Geys, Benny & Heyndels, Bruno, 2006. "Determinants of tax innovation: The case of environmental taxes in Flemish municipalities," European Journal of Political Economy, Elsevier, vol. 22(1), pages 223-247, March.
    4. Schuster, Philipp & Schmitt, Carina & Traub, Stefan, 2013. "The retreat of the state from entrepreneurial activities: A convergence analysis for OECD countries, 1980–2007," European Journal of Political Economy, Elsevier, vol. 32(C), pages 95-112.
    5. David ALTMAN & Rossana CASTIGLIONI, 2008. "Cabinet Determinants Of Structural Reforms In Latin America, 1985–2000," The Developing Economies, Institute of Developing Economies, vol. 46(1), pages 1-25, March.
    6. Arbolino, Roberta & Carlucci, Fabio & Cirà, Andrea & De Simone, Luisa & Ioppolo, Giuseppe & Yigitcanlar, Tan, 2018. "Factors affecting transport privatization: An empirical analysis of the EU," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 149-160.
    7. Simon Fink, 2013. "Policy Convergence with or without the European Union: The Interaction of Policy Success, EU Membership and Policy Convergence," Journal of Common Market Studies, Wiley Blackwell, vol. 51(4), pages 631-648, July.
    8. Di Giulio, Marco & Galanti, Maria Tullia & Moro, Francesco Niccolò, 2016. "Political coalitions, local leaders and the internationalization of local public services in Italy," Utilities Policy, Elsevier, vol. 40(C), pages 144-151.
    9. Geys Benny & Revelli Federico, 2009. "Decentralization, competition and the local tax mix: Evidence from Flanders," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200902, University of Turin.
    10. Armando Castelar Pinheiro & Regis Bonelli & Ben Ross Schneider, 2004. "Pragmatic Policy in Brazil : the political economy of incomplete market reform," Discussion Papers 1035, Instituto de Pesquisa Econômica Aplicada - IPEA.
    11. Potrafke, Niklas, 2017. "Partisan politics: The empirical evidence from OECD panel studies," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 712-750.
    12. Geys, Benny, 2006. "Government weakness and electoral cycles in local public debt: evidence from Flemish municipalities
      [Regierungsschwäche und Wahlzyklen in Zeiten kommunaler Verschuldung: das Beispiel flämischer Kom
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-06, WZB Berlin Social Science Center.
    13. Armando Castelar Pinheiro & Regis Bonelli & Ben Ross Schneider, 2015. "Pragmatic Policy in Brazil: the Political Economy of Incomplete Market Reform," Discussion Papers 0132, Instituto de Pesquisa Econômica Aplicada - IPEA.
    14. Apaydin, Fulya, 2012. "Partisan Preferences and Skill Formation Policies: New Evidence from Turkey and Argentina," World Development, Elsevier, vol. 40(8), pages 1522-1533.

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