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How Privatizations Affect the Level of Perceived Corruption

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  • G. Gulsun Arikan

    (Bogazici University, Turkey)

Abstract

State economic enterprises' decisions are very open to manipulations by bureaucrats and politicians, making the public sector a potential breeding ground for corrupt activities of both monetary and non-monetary forms. Consequently, privatizations would be expected to have a remedial role. Getting rid of the state's productive assets, however, might not reduce corruption if it fails to sever the official—firm connection. The process of privatization, moreover, is notorious for causing corruption. It is up to observation to determine the exact effect of privatizations on corruption. This article attempts to make the first formal, empirical assessment of this relationship, using data made available by the wave of privatizations in the nineties. Results suggest that higher privatization leads to an increase in corruption.

Suggested Citation

  • G. Gulsun Arikan, 2008. "How Privatizations Affect the Level of Perceived Corruption," Public Finance Review, , vol. 36(6), pages 706-727, November.
    • Handle: RePEc:sae:pubfin:v:36:y:2008:i:6:p:706-727
    DOI: 10.1177/1091142107313302
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    References listed on IDEAS

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    Cited by:

    1. Steve Billon & Robert Gillanders, 2016. "State ownership and corruption," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1074-1092, December.
    2. Cheryl Long & Jing Zhang & Jin Yang, 2021. "Uncovering asset stripping during China's privatization," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(4), pages 651-680, October.
    3. , Aisdl, 2017. "Privatization of Vietnam Airlines: a successful reform or a timid policy step," OSF Preprints wknfq, Center for Open Science.
    4. Cuneyt Koyuncu & Harun Ozturkler & Rasim Yilmaz, 2010. "Privatization and corruption in transition economies: a panel study," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(3), pages 277-284.
    5. John Nellis, 2012. "The International Experience with Privatization: Its Rapid Rise, Partial Fall and Uncertain Future," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 5(3), January.
    6. Yeti Nisha Madhoo & Shyam Nath, 2010. "Beneficiary Charges: The Cinderella of Subnational Finance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1317, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Sazzadul Arefin, 2019. "Geographic Endowment, Corruption, and Economic Development," Business and Economic Research, Macrothink Institute, vol. 9(1), pages 1-32, March.
    8. Cuneyt Koyuncu & Harun Ozturkler & Rasim Yilmaz, 2010. "Privatization and corruption in transition economies: a panel study," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 13(3), pages 277-284.

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