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Who Wants to Revise Privatization and Why? Evidence from 28 Post-Communist Countries

Author

Listed:
  • Irina Denisova

    (CEFIR)

  • Markus Eller

    (CEFIR)

  • Timothy Frye

    (Columbia University and the Harriman Institute)

  • Ekaterina Zhuravskaya

    (New Economic School/CEFIR and CEPR)

Abstract

A 2006 survey of 28,000 individuals in 28 post-communist countries reveals overwhelming public support for the revision of privatization in the region. A majority of respondents, however, favors a revision of privatization that ultimately leaves firms in private hands. We identify which factors influence individuals’ support for revising privatization and explore whether respondents’ views are driven by a preference for state property or a concern for the fairness of privatization. We find that human capital poorly suited for a market economy with private ownership and a lack of privately owned assets increase support for revising privatization with the primary reason being a preference for state over private property. Economic hardships during transition and work in the state sector also increase support for revising privatization, but mainly due to the perceived unfairness of privatization. The effects of human capital and asset ownership on support for revising privatization are independent of a countries’ institutional environment. In contrast, good governance institutions amplify the impact of positive and negative transition experiences on attitudes toward revising privatization. In countries with low inequality,individuals with positive and negative transition experiences hold significantly different views about the superiority of private property, but this difference is much smaller in countries with high inequality.

Suggested Citation

  • Irina Denisova & Markus Eller & Timothy Frye & Ekaterina Zhuravskaya, 2007. "Who Wants to Revise Privatization and Why? Evidence from 28 Post-Communist Countries," Working Papers w0105, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0105
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    Cited by:

    1. Martimort, David & Straub, Stéphane, 2009. "Infrastructure privatization and changes in corruption patterns: The roots of public discontent," Journal of Development Economics, Elsevier, vol. 90(1), pages 69-84, September.
    2. Golinelli, Roberto & Rovelli, Riccardo, 2013. "Did growth and reforms increase citizens' support for the transition?," European Journal of Political Economy, Elsevier, vol. 30(C), pages 112-137.
    3. Pauline Grosjean & Claudia Senik, 2008. "How populist democracy promotes market liberalization," PSE Working Papers halshs-00586284, HAL.
    4. Karla Hoff & Joseph E. Stiglitz, 2008. "Exiting a Lawless State," Economic Journal, Royal Economic Society, vol. 118(531), pages 1474-1497, August.
    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. Irina Denisova & Markus Eller & Ekaterina Zhuravskaya, 2007. "What Russians Think about Transition: Evidence from RLMS Survey," Working Papers w0114, Center for Economic and Financial Research (CEFIR).
    7. Jürgen Jerger, 2012. "Zur Akzeptanz politischer und marktwirtschaftlicher Reformen in Osteuropa: Empirische Befunde und Erklärungsansätze," Working Papers 315, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    8. Grosjean, Pauline & Senik, Claudia, 2008. "Why Populist Democracy Promotes Market Liberalization," IZA Discussion Papers 3527, Institute of Labor Economics (IZA).
    9. Sprenger, C., 2010. "State Ownership in the Russian Economy. Part 1. Its Magnitude And Sectoral Distribution," Journal of the New Economic Association, New Economic Association, issue 6, pages 120-140.
    10. Pauline Grosjean & Claudia Senik, 2008. "How populist democracy promotes market liberalization," Working Papers halshs-00586284, HAL.
    11. Daniel Treisman, 2010. ""Loans for Shares" Revisited," NBER Working Papers 15819, National Bureau of Economic Research, Inc.
    12. Yakovlev, Andrei, 2008. "State-business relations and improvement of corporate governance in Russia," BOFIT Discussion Papers 26/2008, Bank of Finland, Institute for Economies in Transition.
    13. Rovelli, Riccardo & Zaiceva, Anzelika, 2009. "Transition Fatigue? Cross-Country Evidence from Micro Data," IZA Discussion Papers 4224, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    privatization; revision; nationalization; property rights; demand for property rights; legitimacy of property rights; transition;
    All these keywords.

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P50 - Economic Systems - - Comparative Economic Systems - - - General

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