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A Spoonful of Sugar: Privatization and Popular Support for Reform in the Czech Republic

  • John S. Earle

    (W.E. Upjohn Institute for Employment Research and Central European University)

  • Scott Gelbach

    (Departments of Political Science and Economics, University of California-Berkeley and CEFIR, Moscow)

We analyze the role of privatization in creating a constituency for economic reform, markets, and democratic institutions, focusing on the Czech Republic. Drawing on a 1996 survey, we examine the 1459 respondents' opinions on reforms, economic policies and systems, the legitimacy of transition, and democratic values. Using ordered probit estimation, we find that receiving property through restitution is strongly associated with support for reform and markets. Concerning voucher privatization, we find positive effects for participants retaining shares, but little impact of participation alone. Our simulations suggest that policy designs have substantial consequences for citizens' support of reforms, markets, and democracy.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 02-79.

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Date of creation: Apr 2002
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Handle: RePEc:upj:weupjo:02-79
Note: A revised version of this paper appears in Economics and Politics, Vol. 15, No. 1 (March 2003). See http://ideas.repec.org/a/bla/ecopol/v15y2003i1p1-32.html. Please cite this revised version.
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  1. Cesar Martinelli & Mariano Tommasi, 1993. "Sequencing of Economic Reforms in the Presence of Political Constraints," UCLA Economics Working Papers 701, UCLA Department of Economics.
  2. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
  3. Harper, Joel T., 2002. "The performance of privatized firms in the Czech Republic," Journal of Banking & Finance, Elsevier, vol. 26(4), pages 621-649, April.
  4. Roland, Gérard, 1994. "The Role of Political Constraints in Transition Strategies," CEPR Discussion Papers 943, C.E.P.R. Discussion Papers.
  5. Grigoriev, Serguei E. & Nagaev, Serguei A. & Wörgötter, Andreas, 1994. "Regional Economic Development and Political Attitudes of the Population of Russia: Results for the December 1993 Federal Elections," East European Series 15, Institute for Advanced Studies.
  6. Dewatripont, M & Roland, G, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Wiley Blackwell, vol. 59(4), pages 703-30, October.
  7. Dewatripont, Mathias & Roland, Gérard, 1993. "The Design of Reform Packages Under Uncertainty," CEPR Discussion Papers 860, C.E.P.R. Discussion Papers.
  8. Claessens, Stijn & Djankov, Simeon, 1999. "Ownership Concentration and Corporate Performance in the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 27(3), pages 498-513, September.
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