Why Do Governments Divest?: The Macroeconomics of PrivatizationOn 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. |
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 |
| 131 | |
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Why Do Governments Divest?: The Macroeconomics of Privatization Alfred Schipke No preview available - 2012 |
Common terms and phrases
additional adjustment adverse aggregate allow assets associated assumed assumption balance Bank behavior benefits billion budget constraint capital companies considerations continued contributed cost countries debt deficit developing divestment domestic economic effects efficiency engage entities example exchange rate expected expenditure export external faced fact financing fiscal foreign Furthermore future given government's growth hence higher impact implications import improvement incentive income increase industrialized inflation institutions interest investment investors issues Jamaica labor lead limited macroeconomic monetary months objectives operations output ownership party payments pension percent of GDP performance period policymakers political position potential private sector privatization receipts production profit public enterprises public sector reasons reduce reflected reforms require respective result retrenchment sale of assets savings short-term suggests term transfer unemployment variables wages workers