Privatization and Nationalization Cycles
This paper studies the cycles of nationalization and privatization in resource-rich economies. It starts with a discussion of available evidence on the drivers and consequences of privatization and nationalization. Then it develops a static and dynamic model of the choice between private and national regimes for the ownership of natural resources. In the model, the choice is driven by a basic equality-efficiency tradeoff: national ownership results in more redistribution of income and more equality but undermines incentives for effort. The resolution of the tradeoff depends on external and domestic conditions that affect social welfare under each regime. We characterize how external variables –such as the commodity price– and domestic ones –such as the tax system– affect the choice of private vs. national regimes. Our analysis therefore identifies the determinants of the observed cycles of privatization and nationalization and is consistent with key stylized facts.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alberto E. Chong & Florencio López-de-Silanes, 2003. "Privatization and Labor Force Restructuring around the World," IDB Publications (Working Papers) 1460, Inter-American Development Bank.
- Roderick Duncan, 2006. "Price or politics? An investigation of the causes of expropriation ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), pages 85-101, March.
- James A. Schmitz, Jr. & Arilton Teixeira, 2008.
"Privatization's Impact on Private Productivity: The Case of Brazilian Iron Ore,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 745-760, October.
- James A. Schmitz & Arilton Teixeira, 2004. "Privatization's impact on private productivity: the case of Brazilian iron ore," Staff Report 337, Federal Reserve Bank of Minneapolis.
- Sergei Guriev & Anton Kolotilin & Konstantin Sonin, 2011. "Determinants of Nationalization in the Oil Sector: A Theory and Evidence from Panel Data," Journal of Law, Economics and Organization, Oxford University Press, vol. 27(2), pages 301-323.
- Sergei Guriev & Konstantin Sonin & Anton Kolotilin, 2007. "Determinants of Expropriation in the Oil Sector: A Theory and Evidence from Panel Data," Working Papers w0115, Center for Economic and Financial Research (CEFIR).
- Guriev, Sergei & Kolotilin, Anton & Sonin, Konstantin, 2008. "Determinants of Expropriation in the Oil Sector: A Theory and Evidence from Panel Data," CEPR Discussion Papers 6755, C.E.P.R. Discussion Papers.
- Osmel Manzano & Francisco Monaldi, 2008. "The Political Economy of Oil Production in Latin America," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2008), pages 59-103, August.
- Rogerson, William P, 1985. "The First-Order Approach to Principal-Agent Problems," Econometrica, Econometric Society, vol. 53(6), pages 1357-1367, November.
- Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
- repec:idb:idbbks:348 is not listed on IDEAS
- Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
- Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
- Vining, Aidan R & Boardman, Anthony E, 1992. "Ownership versus Competition: Efficiency in Public Enterprise," Public Choice, Springer, vol. 73(2), pages 205-239, March.
- Alberto Chong & Florencio López-de-Silanes, 2005. "Privatization in Latin America : Myths and Reality," World Bank Publications, The World Bank, number 7461, April.
- Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
- Johannes Stroebel & Arthur van Benthem, 2013. "Resource Extraction Contracts Under Threat of Expropriation: Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1622-1639, December.
- Atkinson, Giles & Hamilton, Kirk, 2003. "Savings, Growth and the Resource Curse Hypothesis," World Development, Elsevier, vol. 31(11), pages 1793-1807, November.
- Robert T. Deacon & Henning Bohn, 2000. "Ownership Risk, Investment, and the Use of Natural Resources," American Economic Review, American Economic Association, vol. 90(3), pages 526-549, June.
- Bohn, Henning & Deacon, Robert, 1997. "Ownership Risk, Investment, and the Use of Natural Resources," Discussion Papers dp-97-20, Resources For the Future.
- James D. Hamilton, 2009. "Understanding Crude Oil Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 179-206.
- James D. Hamilton, 2008. "Understanding Crude Oil Prices," NBER Working Papers 14492, National Bureau of Economic Research, Inc.
- Alberto Chong & Florencio López-de-Silanes, 2005. "Privatization in Latin America : Myths and Reality," World Bank Publications, The World Bank, number 7461, September.
- Florencio López-de-Silanes & Pablo Serra & Paul Gertler & Ernesto Schargrodsky & Francisco Anuatti & Sebastián Galiani & Alberto E. Chong & Carlos Pombo & Federico Sturzenegger & Máximo Torero & Carlo, 2005. "Privatization in Latin America: Myths and Reality," IDB Publications (Books), Inter-American Development Bank, number 59618 edited by Florencio López-de-Silanes & Alberto E. Chong, February.
- Michael S Minor, 1994. "The Demise of Expropriation as an Instrument of LDC Policy 1980-1992," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(1), pages 177-188, March.
- Wolf, Christian, 2009. "Does ownership matter? The performance and efficiency of State Oil vs. Private Oil (1987-2006)," Energy Policy, Elsevier, vol. 37(7), pages 2642-2652, July.
- Nandini Gupta, 2005. "Partial Privatization and Firm Performance," Journal of Finance, American Finance Association, vol. 60(2), pages 987-1015, April.
- Facundo Albornoz & Sebastian Galiani & Daniel Heymann, 2012. "Foreign investment and expropriation under oligarchy and democracy," Economics and Politics, Wiley Blackwell, vol. 24(1), pages 24-46, March.
- Mahdavi, Paasha, 2014. "Why do leaders nationalize the oil industry? The politics of resource expropriation," Energy Policy, Elsevier, vol. 75(C), pages 228-243.
- Federico Sturzenegger & Mariano Tommasi (ed.), 1998. "The Political Economy of Reform," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262194007, January.
- repec:idb:brikps:59618 is not listed on IDEAS
- Shafer, Michael, 1983. "Capturing the mineral multinationals: advantage or disadvantage?," International Organization, Cambridge University Press, vol. 37(01), pages 93-119, December.
- Brainerd, Elizabeth, 2002. "Five Years after: The Impact of Mass Privatization on Wages in Russia, 1993-1998," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 160-190, March.
- Perotti, Enrico C, 1995. "Credible Privatization," American Economic Review, American Economic Association, vol. 85(4), pages 847-859, September.
- Boubakri, Narjess & Cosset, Jean-Claude & Guedhami, Omrane, 2005. "Liberalization, corporate governance and the performance of privatized firms in developing countries," Journal of Corporate Finance, Elsevier, vol. 11(5), pages 767-790, October.
- Duncan, Roderick, 2006. "Price or politics? An investigation of the causes of expropriation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), March.
- Noguera, José, 2013. "Oil prices: Breaks and trends," Energy Economics, Elsevier, vol. 37(C), pages 60-67.
- Nemat Shafik, 1996. "Selling Privatization Politically," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 3(3), pages 367-378. Full references (including those not matched with items on IDEAS)