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Inequality, Privatization and Democratic Institutions in Developing Countries


  • Lidia Ceriani

    () (The World Bank)

  • Simona Scabrosetti

    () (Università di Pavia e DONDENA)

  • Francesco Scervini

    () (School of Advanced Studies IUSS Pavia)


We study the distributional impact of privatization in the light of the democrati- zation process in developing countries which have recently experienced economic and political transitions. Using an unbalanced panel of 80 countries in the period 1988-2008, we find that privatization is negatively and significantly correlated with inequality when democratic institutions are well consolidated, and positively when they are not. Our evidence suggests an interesting policy implication for developing countries: only after having established mature representative political institutions, privatization appears to be related to a reduction in income inequality.

Suggested Citation

  • Lidia Ceriani & Simona Scabrosetti & Francesco Scervini, 2016. "Inequality, Privatization and Democratic Institutions in Developing Countries," Working papers 45, Società Italiana di Economia Pubblica.
  • Handle: RePEc:ipu:wpaper:45

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    Inequality; Democracy; Privatization; Developing countries;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P5 - Economic Systems - - Comparative Economic Systems

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