Suchergebnisse

Globalization, Democracy, and Government Spending in Sub-Saharan Africa: Evidence from Panel Data

In the 1960s and 1970s academicians, economists and politicians favored state ownership over private ownership in the production and provision of goods and services. By the end of the 1980s, however, there was a reversal of public policy from state domination of the production and provision of goods and services to private ownership and operation. This was due in part to what the World Bank referred to as "state failure", which was characterized by inefficient service delivery, unprofitable SOEs, high government debt, and stagnant economic growth rates. Accordingly, privatization caught on in many countries as a policy tool to foster efficiency, encourage investment, free public resources for investment in infrastructure and social programs to enhance economic growth and distributional equity. In recent years, however, privatization has come under attack. The main criticism being that privatization results in the abuse of market power and social welfare losses. The perception of most people in the developing countries is that privatization usually benefits the rich at the expense of the poor in society. This study therefore is an attempt to empirically examine the claims and counter claims of the impact of privatization on economic growth and income distribution in developing countries. The study sample is made up of 80 developing countries that privatized their state-owned enterprises between 1991 and 2002. The findings of the study indicate that privatization did not have a significant impact on economic growth, but had differential effects on the distribution of income. The results of the study, however, suggest that country-specific characteristics, including good governance may be more important in promoting growth and reducing income inequality than any economic policy per se.

The study examines the impact of privatization on economic growth and income inequality in Sub-Saharan Africa (SSA) between 1990 and 2001. The main findings of the study are: privatization did not contribute to growth but helped to reduce income inequality; inflation contributed negatively to both economic growth and income equalization; and governance infrastructure enhanced growth between 1990 and 2001. Though, the study is one of the first to analyze the impact of privatization in SSA, the results reported leads us to reject the hypothesis that privatization boosted economic growth in SSA between 1990 and 2001. The study's findings suggest that the necessary market supporting institutions must be in place for privatization to have an appreciable impact on the economy. Adapted from the source document.

Introduces Albert Parker, who is to enter the Academy. ; Transcriptions may be subject to error.