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Everyone hates privatization, but why? Survey evidence from 28 post-communist countries

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Listed author(s):
  • Denisova, Irina
  • Eller, Markus
  • Frye, Timothy
  • Zhuravskaya, Ekaterina

Abstract

Studies of mass support for economic reform reveal a simple conclusion: Everyone hates privatization. Yet whether respondents hold this view due to a preference for state property or concerns about the legitimacy of privatization is unclear. We test these arguments using a 2006 survey of 28,000 individuals in 28 post-communist countries and find that a lack of human capital affects support for revising privatization primarily via a preference for state property over private property; whereas transition-related hardships influence support for revising privatization due to both a preference for state property and concerns about the legitimacy of privatization. These results suggest the value of analyses that not only link respondent traits with support for policy, but that also probe the motivations that underpin this support. They also indicate that opposition to privatization should not be equated with support for renationalization.

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 40 (2012)
Issue (Month): 1 ()
Pages: 44-61

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Handle: RePEc:eee:jcecon:v:40:y:2012:i:1:p:44-61
DOI: 10.1016/j.jce.2011.11.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

Keywords: Privatization; Revision; Nationalization; Legitimacy of property rights; Transition;

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Find related papers by JEL classification:
  • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
  • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
  • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
  • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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  1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  2. Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
  3. Irina Denisova & Markus Eller & Ekaterina Zhuravskaya, 2010. "What do Russians think about transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(2), pages 249-280, 04.
  4. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
  5. Sergei Guriev & Ekaterina Zhuravskaya, 2009. "(Un)happiness in Transition," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 143-168, Spring.
  6. Hoff, Karla, 2008. "Joseph E. Stiglitz," Policy Research Working Paper Series 4478, The World Bank.
  7. Ugo Panizza & Mónica Yañez, 2005. "Why are Latin Americans so unhappy about reforms?," Journal of Applied Economics, Universidad del CEMA, vol. 8, pages 1-29, May.
  8. Sonin, Konstantin, 2003. "Why the rich may favor poor protection of property rights," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 715-731, December.
  9. Karla Hoff & Joseph E. Stiglitz, 2004. "After the Big Bang? Obstacles to the Emergence of the Rule of Law in Post-Communist Societies," American Economic Review, American Economic Association, vol. 94(3), pages 753-763, June.
  10. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
  11. Denisova, Irina & Eller, Markus & Frye, Timothy & Zhuravskaya, Ekaterina, 2009. "Who Wants To Revise Privatization? The Complementarity of Market Skills and Institutions," CEPR Discussion Papers 7260, C.E.P.R. Discussion Papers.
  12. Di Tella, Rafael & Galiani, Sebastian & Schargrodsky, Ernesto, 2012. "Reality versus propaganda in the formation of beliefs about privatization," Journal of Public Economics, Elsevier, vol. 96(5), pages 553-567.
  13. Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, vol. 88(5), pages 1094-1116, December.
  14. Dewatripont, M & Roland, G, 1992. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," Economic Journal, Royal Economic Society, vol. 102(411), pages 291-300, March.
  15. Rodrik Dani, 1995. "The Dynamics of Political Suppport for Reform in Economies in Transition," Journal of the Japanese and International Economies, Elsevier, vol. 9(4), pages 403-425, December.
  16. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 699-728, September.
  17. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
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Cited by:

  1. Djankov, Simeon & Nikolova, Elena & Zilinsky, Jan, 2016. "The happiness gap in Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 108-124.
  2. Kowalski, Tadeusz, 2013. "Globalization and Transformation in Central European Countries: The Case of Poland," MPRA Paper 59306, University Library of Munich, Germany.
  3. Sergei Guriev & Ekaterina Zhuravskaya, 2009. "(Un)happiness in Transition," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 143-168, Spring.
  4. Castañeda Dower, Paul & Markevich, Andrei, 2014. "A history of resistance to privatization in Russia," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 855-873.
  5. Polterovich (Полтерович), Victor (Виктор), 2012. "Приватизация И Рациональная Структура Собственности. Часть 1. Приватизация: Проблема Эффективности
    [Privatization and the rational ownership structure. Part 1: privatization: the effeciency problem    ," MPRA Paper 64145, University Library of Munich, Germany.
  6. Afontsev, S., 2013. "Privatize or Not? Escaping Budget Temptation and Nirvana Fallacy," Journal of the New Economic Association, New Economic Association, vol. 20(4), pages 150-153.
  7. Voszka, Éva, 2013. "Államosítás, privatizáció, államosítás
    [Nationalization, privatization, nationalization]    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1289-1317.
  8. Chao-yo Cheng & Johannes Urpelainen, 2016. "Unawareness and indifference to economic reform among the public: evidence from India’s power sector reform," Economics of Governance, Springer, vol. 17(3), pages 211-239, August.
  9. Voszka, Éva, 2015. "Államosítás, privatizáció és gazdaságpolitika - a főirány széttöredezése
    [Nationalization and privatization - in the shadow of changing paradigms of economic policy]    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 717-748.
  10. Polterovich, Victor, 2012. "Приватизация И Рациональная Структура Собственности. Часть 1. Приватизация: Проблема Эффективности
    [Privatization and the rational ownership structure. Part 1: privatization: the effeciency problem    ," MPRA Paper 64371, University Library of Munich, Germany.
  11. Polterovich, Victor, 2016. "Институциональные Реформы И Гражданская Культура
    [Institutional Reforms and Civic Culture]    ," MPRA Paper 71658, University Library of Munich, Germany.
  12. Cancho,Cesar A. & Davalos,Maria Eugenia & Sanchez,Carolina, 2015. "Why so gloomy ? perceptions of economic mobility in Europe and Central Asia," Policy Research Working Paper Series 7519, The World Bank.
  13. Irina Denisova, 2016. "Institutions and the support for market reforms," IZA World of Labor, Institute for the Study of Labor (IZA), pages 258-258, May.
  14. Del Bo, Chiara D. & Ferraris, Matteo & Florio, Massimo, 2017. "Governments in the market for corporate control: Evidence from M&A deals involving state-owned enterprises," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 89-109.
  15. Polterovich, Victor, 2012. "Приватизация и рациональная структура собственности (Privatizatsiya i ratsional’naya struktura sobstvennosti)
    [Privatization and the Rational Ownership Structure]    ," MPRA Paper 41069, University Library of Munich, Germany.
  16. Ivanovic, Vladan & Kufenko, Vadim & Begovic, Boris & Stanisic, Nenad & Geloso, Vincent, 2016. "Continuity under a different name: The outcome of privatisation in Serbia," Hohenheim Discussion Papers in Business, Economics and Social Sciences 10-2016, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
  17. Senderski, Marcin, 2015. "Inhibited privatization: a hurdle race over vested interests," MPRA Paper 65482, University Library of Munich, Germany.
  18. Michaël Aklin & Patrick Bayer & S. Harish & Johannes Urpelainen, 2014. "Information and energy policy preferences: a survey experiment on public opinion about electricity pricing reform in rural India," Economics of Governance, Springer, vol. 15(4), pages 305-327, November.

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