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Massive Divestiture And Privatization Lessons From Chile

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  • ROLF J.LÜDERS

Abstract

Between 1974 and 1989, the Chilean government privatized 550 state‐owned enterprises (SOEs). Before 1974, all but a handful of major corporations were SOEs. About 50 of the largest enterprises privatized during the 1970s fell into government hands again, only to be re‐privatized later. This was due partly to the economic and financial crisis affecting most Latin American countries during the early 1980s but also was a consequence of the privatization modes used. This paper analyzes that unique privatization experience so as to extract policy lessons. The analysis focuses on economic conditions, objectives of government policy, privatization modes, and the divestiture effects on employment, fiscal revenues, public sector wealth, spread of ownership, and capital market development.

Suggested Citation

  • Rolf J.Lüders, 1991. "Massive Divestiture And Privatization Lessons From Chile," Contemporary Economic Policy, Western Economic Association International, vol. 9(4), pages 1-19, October.
    • Handle: RePEc:bla:coecpo:v:9:y:1991:i:4:p:1-19
    DOI: 10.1111/j.1465-7287.1991.tb00347.x
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    References listed on IDEAS

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    1. Vuylsteke, C., 1988. "Techniques Of Privatization Of State-Owned Enterprises -," Papers 88, World Bank - Technical Papers.
    2. Corbo, Vittorio, 1985. "Reforms and macroeconomic adjustments in Chile during 1974-1984," World Development, Elsevier, vol. 13(8), pages 893-916, August.
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    Cited by:

    1. Ramirez, Miguel D., 1998. "Does public investment enhance labor productivity growth in Chile? A cointegration analysis," The North American Journal of Economics and Finance, Elsevier, vol. 9(1), pages 45-65.
    2. Miguel Ramirez, 2000. "The impact of public investment on private investment spending in Latin America: 1980–95," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 28(2), pages 210-225, June.
    3. Ramirez, Miguel D., 1998. "Privatization and Regulatory Reform in Mexico and Chile: A Critical Overview," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(3, Part 1), pages 421-439.
    4. Sebastian Edwards, 1996. "Public Sector Deficits and Macroeconomic Stability in Developing Countries," NBER Working Papers 5407, National Bureau of Economic Research, Inc.
    5. Perotti, Enrico C & van Oijen, Pieter, 1999. "Privatization, Political Risk and Stock Market Development," CEPR Discussion Papers 2243, C.E.P.R. Discussion Papers.

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