Privatization in developing countries

Many public policies move in and out of fashion, but few have shifted in pendulum-like manner to the extent of privatization.

For more, see John Nellis’ new paper on ‘Privatization in Developing Countries: A Summary Assessment’:

Despite the comparative success, infrastructure privatization remains a problem, especially in low-income countries, and most acutely in the electricity and water and sewerage sectors. There, because of the essential nature of the goods produced, because of the level of decrepitude of the businesses being privatized, because of the unwillingness or inability of governments to impose costs on elites, and because of the relative power of the private investors vis-à-vis the civil servants they deal with before and after the transaction, it has proven hard to construct credible and enduring transactions. A number of renegotiations, nonrenewals, and outright cancellations of contracts have occurred (Harris 2003). Because of the problems, it has proven easy to cast privatization—not just in infrastructure but across the board—in the role of a (or even the) social villain; the tool of the rich, the foreign, the corrupt. In sum, privatization has everywhere and inevitably proven to be an intensely political event, even more than most other economic reform measures.

He of course uses our privatization database. At the end of the paper also find a presentation by Nellis at ECES with questions and feedback from the audience. More?