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Privatization Rarely in Public or National Interest

Author

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  • Kwame Sundaram Jomo

    (Khazanah Research Institute)

  • Anis Chowdhury

    (Western Sydney University)

Abstract

Privatization of state owned enterprises (SOEs) has been a key plank of the neo-liberal counter-revolution against economic development since the 1980s. Privatization’s promoters promised improved efficiency and improved fiscal balances, both supposedly contributing to higher economic growth. Privatization was also supposed to ensure improved consumer welfare through increased competition and lower prices. Empirical support for these claims is scant and often contradictory. Thus, in many cases, privatization has been worse as a solution to the ills it purported to overcome. The problems of SOEs are not necessarily due to public ownership per se. In any case, there are alternative governance, management and organization means to improve SOE performance without privatization.

Suggested Citation

  • Kwame Sundaram Jomo & Anis Chowdhury, 2018. "Privatization Rarely in Public or National Interest," Development, Palgrave Macmillan;Society for International Deveopment, vol. 61(1), pages 84-88, December.
    • Handle: RePEc:pal:develp:v:61:y:2018:i:1:d:10.1057_s41301-018-0187-0
    DOI: 10.1057/s41301-018-0187-0
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    References listed on IDEAS

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    1. Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
    2. János Kornai, 2014. "The soft budget constraint," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
    3. Jones, Steven L. & Megginson, William L. & Nash, Robert C. & Netter, Jeffry M., 1999. "Share issue privatizations as financial means to political and economic ends," Journal of Financial Economics, Elsevier, vol. 53(2), pages 217-253, August.
    4. Mr. Sanjeev Gupta & Mr. Henry Ma & Mr. Christian Schiller, 1999. "Privatization, Social Impact, and Social Safety Nets," IMF Working Papers 1999/068, International Monetary Fund.
    5. Dewenter, Kathryn L & Malatesta, Paul H, 1997. "Public Offerings of State-Owned and Privately-Owned Enterprises: An International Comparison," Journal of Finance, American Finance Association, vol. 52(4), pages 1659-1679, September.
    6. David Parker & David Saal (ed.), 2003. "International Handbook on Privatization," Books, Edward Elgar Publishing, number 2330.
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    Cited by:

    1. Jomo Kwame Sundaram, 2023. "Privatization Solution is the Problem," Development, Palgrave Macmillan;Society for International Deveopment, vol. 66(1), pages 23-31, June.

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