Why Do Governments Divest?: the macroeconomics of privatization : with 11 figures and 14 tables

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Springer Science & Business Media, Mar 13, 2001 - Business & Economics - 141 pages
On an unprecedented scale, nations at all income levels and across the political spectrum have initiated privatization programs over the past twenty years. In the course of this privatization movement, microeconomic efficiency arguments have become the standard justification for the divestment of public assets. This book presents an alternate view and argues that short-term macroeconomic considerations are often the true motive behind privatization programs. Why Do Government Divest? The Macroeconomics of Privatization is a comprehensive treatment of the macroeconomic issues of privatization. In addition to reviewing topics in economic growth and efficiency, this book explores the fiscal, monetary, balance-of-payments, and employment aspects of privatization. Several diverse case studies illustrate how the pursuit of such short-term political objectives can reduce the benefits of privatization.
 

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Contents

Introduction
1
Economic Growth and Efficiency
9
21 Growth theories and empirical growth studies
11
22 The impact of privatization on output
15
221 Labor markets
17
222 Privatization and the financial system
18
223 How do enterprises perform after privatization?
20
23 Social security and privatization
22
532 Privatization and unemployment
68
533 Employment commitments
71
534 Severance payments and retrenchment benefits
72
the case of Pakistan
74
542 Political opposition to privatization and retrenchment benefits
77
543 Costs and impacts of the buyout of surplus workers
78
544 The lack of transparency
81
55 Summary
82

24 Summary
26
The Politics of Privatization
29
31 Politicaleconomy theories of macroeconomic policymaking
30
312 Political business cycles
32
313 Party platforms and economic policy
33
32 Government behavior and privatization
34
33 Summary
35
Fiscal Considerations of Privatization
37
42 Ricardian equivalence
40
43 The one period budget constraint
42
privatization in Germany and EMU
49
442 Periods of Privatization
50
45 Summary
54
Macroeconomic Considerations of Privatization
57
511 Capital inflows
60
512 Debtequity swaps
62
52 Balanceofpayments crises
63
53 Employment considerations of privatization
66
Modeling the Effects of Privatization
85
61 Outline of the framework
86
62 Baseline scenario
89
63 Privatization scenarios
92
632 Privatization and fiscal expansion
93
633 Privatization and the fight against inflation
94
64 Summary
95
65 Appendix
97
Coming Full Circle The Case of Jamaica
109
72 The role of the government and Jamaicas growth puzzle
110
721 Continued government involvement
112
722 Government involvement in the Financial sector
117
73 Jamaicas political system and halfhearted reforms
121
74 Summary
124
Summary and Conclusion
127
References
131
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Page 132 - Privatization and Employment: a Study of the Jute Industry in Bangladesh', American Economic Review 85 (1):267- 273.

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