Privatization and economic growth in Australia: the shorthand of a long process

The impact of privatization on economic growth has been little investigated relative to disaggregated approaches. A growth accounting framework is used here to investigate the impact of privatization on growth for the  Australian economy. The contribution of public capital to the private sector and whether the growth process is endogenous or Solow is evaluated. Separate measures of public and private capital are computed in order to estimate their impacts with labour on Australian gross domestic product (GDP) growth for the period 1960 to 2003. A simple growth rates version is found preferred by stationarity and other tests. Labour growth appears to strongly positively influence the growth of GDP. In contrast, public capital growth has no statistically significant effect on GDP growth, or on private capital productivity. The data are consistent with the hypothesis that the coefficients of the growth equation are the same before and during privatization.

Leviathan resists : the endogenous relationship between privatization and firm performance

Using a panel dataset of privatized cement firms in Turkey, this paper models and finds support for the simultaneous relationship between privatization and firm performance. It is found that favorable short-run performance, weak market potential, higher employment, lower socio-economic development, concentrated voter preferences, and weaker representation of right-wing parties in the firms’ locality delay the timing of privatization. The paper also finds that privatization increases output in the medium-term by reducing the labor stock and promoting the adoption of more advanced technology, such that production shifts from constant to decreasing returns to scale.

An efficient privatization mechanism

We consider the privatization of State-Owned Enterprises (SOEs) of which markets can be opened to competition once privatization takes place and competitors can compete successfully against them in a few years. The currently used "Revenue Maximization (RM)" scheme maximizes the government revenue from privatization but does not provide incentives for the privatized SOE to charge a price lower than the monopoly price until competition arises. We propose the "Welfare Maximization (WMY scheme, which induces the privatized SOE to charge a competitive price without resorting to regulation. Also, WM provides greater incentives for post-privatization cost reduction.

Privatization and performance : the case of four Australian financial institutions

This paper investigates the performance after privatization of institutions in Australian banking and insurance. Privatization was anticipated to improve firm performance in Australia and elsewhere, yet findings are mixed. A comparative institutional approach is taken to analyzing firm performance in the longer term which allows for further structural change. A CAMEL analysis of performance before and after privatization events is undertaken for four privatized institutions, two each from banking and insurance sectors. These are matched with private peer institutions. Privatized institutions are found to perform quite similarly to private peer institutions both before and after privatization.

An attack-resistant hybrid data-privatization method with low information loss

We examine a recent proposal for data-privatization by testing it against well-known attacks, we show that all of these attacks successfully retrieve a relatively large (and unacceptable) portion of the original data. We then indicate how the data-privatization method examined can be modified to assist it to withstand these attacks and compare the performance of the two approaches. We also show that the new method has better privacy and lower information loss than the former method.

Wage inequality and welfare in developing countries: privatization and reforms in the short and long run

The impacts of privatization on wage inequality and welfare are considered for developing countries. In the short run, privatization can narrow wage inequality but reduce output of public firms. However, the favorable effect of privatization on lowering wage inequality vanishes in the long run due to the excessive entry of public firms. Thus, a policy recommendation for privatization would be: to avoid rising wage inequality, entry regulation of public firms should be imposed in the short run, and to mitigate the output contraction, complementary structural changes or policy reforms are needed in the transitional period of privatization.

Infrastructure privatization in a neoclassical economy : macroeconomic impact and welfare computation

In this paper a competitive general equilibrium model is used to investigate the welfare and long run allocation impacts of privatization. There are two types of capital in this model economy, one private and the other initially public ("infrastructure"), and a positive externality due to the latter is assumed. A benevolent government can improve upon decentralized allocation internalizing the externality, but it introduces distortions in the economy through the finance of its investments. It is shown that even making the best case for public action - maximization of individuals' welfare, no• operation inefficiency and free supply to society of infrastructure services - privatization is welfare improving for a large set of economies. Hence, arguments against privatization based solely on under-investment are incorrect, as this maybe the optimal action when the financing of public investment are considered. When operation inefficiency is introduced in the public sector, gains from privatization are much higher and positive for most reasonable combinations of parameters .

Infrastructure privatization in a neoclassical economy: macroeconomic impact and welfare computation

In this paper a competi tive general equilibrium model is used to investigate the welfare and long run allocation impacts of privatization. There are two types of capital in this model economy, one private and the other initially public ("infrastructure"), and a positive extemality due to the latter is assumed. A benevolent governrnent can improve upon decentralized allocation intemalizing the extemality, but it introduces distortions in the economy through the finance of its investments. It is shown that even making the best case for public action - maximization of individuais' welfare, no operation inefficiency and free supply to society of infrastructure services - privatization is welfare improving for a large set of economies. Hence, arguments against privatization based solely on under-investment are incorrect, as this maybe the optimal action when the financing of public investment are considered. When operation inefficiency is introduced in the public sector, gains from privatization are much higher and positive for most reasonable combinations of parameters.

Brazilian privatization : a decade of experience

In this paper we review the ten-year-old Brazilian experience with privatization. We start by describing the expansion in the last half century of the role played by state enterprises, and then the privatization effort in the Figueiredo and Sarney administrations. After that, we examine what haa changed with Collor and what the prospects for his privatization program are.

Water for life : the impact of the privatization of water services on child mortality

While most countries are committed to increasing access to safe water and thereby reducing child mortality, there is little consensus on how to actually improve water services. One important proposal under discussion is whether to privatize water provision. In the 1990s Argentina embarked on one of the largest privatization campaigns in the world including the privatization of local water companies covering approximately 30 percent of the country’s municipalities. Using the varia tion in ownership of water provision across time and space generated by the privatization process, we find that child mortality fell 8 percent in the areas that privatized their water services; and that the effect was largest (26 percent) in the poorest areas. We check the robustness of these estimates using cause specific mortality. While privatization is associated with significant reductions in deaths from infectious and parasitic diseases, it is uncorrelated with deaths from causes unrelated to water conditions.

The risk of falling into the acceleration trap during a privatization process: a case study of a European telecommunication company

A privatização de uma empresa é uma mudança empresarial disruptiva que geralmente coincide com o fim de uma posição de monopólio e da subsequente entrada num ambiente competitivo. Os desafios que a privatização coloca são tão árduos que eles levam muitas vezes a liderança (leadership) para executar planos ambiciosos de mudança empresarial. No entanto, a literatura mostra que muitos deles falharam. Na verdade, esses planos preveem mudanças bruscas e importantes que tendem a empurrar a empresa privatizada na armadilha de aceleração (acceleration trap). Um tipo de “burnout organizacional” (organizational burnout) onde a exaustão e a resignação da força de trabalho afetam drasticamente o desempenho da empresa. A tese, portanto, focalizou em estudar a ligação entre um processo de privatização e o risco de cair na armadilha de aceleração. Uma investigação preliminar sobre a literatura das mudanças empresariais permitiu a concepção de um quadro preliminar teórico que sugere a existência de dois moderadores (moderators) deste relacionamento entre um processo de privatização e a armadilha de aceleração: um “choque cultural” (cultural clash) e um “fraco clima de liderança transformacional” (weak transformational leadership). Em seguida, um estudo de caso - baseado numa empresa de telecomunicações europeia e conduzido através de uma abordagem metodológico não puramente indutivo (non-purely inductive approach) - confirma, mas também aprofunda a compreensão da ação desses dois moderadores. A respeito do moderador “choque cultural” (cultural clash moderator), a análise de dados do estudo de caso da empresa de telecomunicações europeia mostra a importância exercitado tanto por um “choque de identidade corporativa” (corporate identity conflict) como por um “conflito de identidade gerencial” (management identity conflict). Quanto ao moderador “fraco liderança transformacional”, a análise dos dados destaca o papel da “falta de confiança na nova gerência” (lack of trust in the new management), mas também de “sentido do trabalho” (lack of job sense), principalmente através da perda de “orgulho no trabalho” (loss of proudness). Finalmente, a análise dos dados salienta que a “não aceitação do novo sistema de incentivos” (non-acceptance of the new incentive system) afeta significativamente a relação entre a privatização e a armadilha de aceleração, contribuindo tanto para um “choque cultural” como para um “fraco clima de liderança transformacional”.

Models of privatization and development of competition in telecommunications in Central America and Mexico

Incluye Bibliografía

Revisiting privatization, foreign investment, international arbitration, and water

Includes bibliography