cover image: The international experience with privatization

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The international experience with privatization

1 Feb 2012

Prior to 2000, proceeds from sales had been highest in OECD countries,12 followed by Latin America – led by the privatization of large infrastructure and energy firms in Argentina, Bolivia, Brazil, Chile, Colombia and several others – and Asia, due to the spate of sales by China late in the 1990s.13 The number of pre-2000 transactions had been highest in the formerly socialist countries, in East a [...] Privatization Barometer notes a recent increase in mega-privatizations, pointing to the $27.5 billion raised by the partial sale of Brazil’s Petrobras to private investors in 2010, and the $22.1 billion raised by an IPO of a portion of the equity of the Agricultural Bank of China (in the same year). [...] The prevalence of “incomplete contracts” has led to faulty concession design, which, in turn, has led to demands from one or the other r of the partners that the terms of the agreement be renegotiated well before the expiry of the contract period. [...] The problem is that the method is extremely demanding in terms of information concerning the before and after performance of the firm, the isolation of the effects of ownership change from the effects of accompanying policy changes, and the precise calculation of the losses and gains, due to privatization, and their differing allocation to relevant groups of actors. [...] In rough order of frequency and intensity, the leading public perceptions and complaints are that privatization, regardless of its efficiency effects: • Increases unemployment; • Leads to higher prices, especially of essential services such as water and electricity, and reduces access to these services, particularly for the poor; • Rewards the rich, the agile, the foreign and the corrupt at the ex
government education politics economics economy poverty privatization infrastructure corruption business economic policy employment investments labour ownership transport economic sector welfare financial crises price layoffs low-income transition countries layoff competitors lower income the world bank privatized european bank of reconstruction and development

Authors

Nellis, John

Pages
38
Published in
Canada

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