Bank Privatization in Argentina: A Model of Political Constraints and Differential Outcomes
World Bank, Development Research Group, Regulation and Competition Policy and Finance, 2001 - Bancos - Argentina - 32 pages
In describing outcomes, the literature on privatization has paid little attention to politicians' incentives, perhaps because it lacked the kinds of evidence needed to do so. Evidence from the privatization of provincial Argentine banks in the 1990s indicates that transaction contract features vary systematically with proxies for politicians' incentives. Will variation in transaction features have implications for post-privatization performance?
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additional assets Argentina assets and liabilities assets assumed attractive available Not available bank performance bank privatization contracts bank quality Central Bank Clarke and Cull Class A shares comparative statics contract features contract provisions Convertibility Plan dummy Equilibrium f(xr fewer layoffs fiscal deficit Fondo Fiduciario future solvency Gov't h(xr Jujuy Keep at least likelihood of privatization loan portfolio managers million million million percent pesos Policy Research political incentives politicians poor performance post-privatization performance potential buyers pre-privatization assets predictions private owners privatization decisions privatized assets privatized bank privatized entity protect fewer jobs province's fiscal provincial bank privatizations provincial banking sector provincial governments provincial policymakers provincial politicians proxy public banks public enterprises public ownership public provincial banks re-capitalize recovered residual assets Research Working Paper restrictions on layoffs Rio Negro risky assets service contract shares Maintain service state-owned enterprises suggests t-stat Tequila Crisis tradeoffs faced Tucuman variable workers World Bank