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Privatisation and government spending efficiency: An empirical analysis in Europe

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  • Beatriz Cuadrado‐Ballesteros
  • Noemí Peña‐Miguel

Abstract

Academic literature has made an effort to demonstrate the positive effects of privatisation reforms on government performance and economic growth. However, there is no sufficient evidence to support the benefits of privatisation in terms of government spending efficiency. This study analyses the correlation between privatisation and government spending efficiency. Our empirical results do not support a positive effect of privatisation on government spending efficiency. These findings are relevant because they suggest that, although privatisation has been usually seen as a tool to balance public finances, it does not mean that government spending efficiency will be higher after privatising State‐owned enterprises.

Suggested Citation

  • Beatriz Cuadrado‐Ballesteros & Noemí Peña‐Miguel, 2024. "Privatisation and government spending efficiency: An empirical analysis in Europe," Scottish Journal of Political Economy, Scottish Economic Society, vol. 71(4), pages 625-648, September.
    • Handle: RePEc:bla:scotjp:v:71:y:2024:i:4:p:625-648
    DOI: 10.1111/sjpe.12386
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