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Privatization, Governance and Economic Development in Developing Countries

Author

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  • Samuel Adams

    (Samuel Adams, PhD, is at the Ghana Institute of Management and Public Administration, P.O. Box AH 50, Achimota Accra, Ghana. [email: sadamss2000@yahoo.com])

  • Berhanu Mengistu

    (Berhanu Mengistu, PhD, is Department Chair at Department of Public Administration and Urban Studies, College of Business and Public Administration, 2090 Constant Hall, Old Dominion University, Norfolk, VA 23529-0218. [email: bmengist@odu.edu])

Abstract

The study examined the impact of privatization on economic growth and income inequality in 82 developing countries between 1991 and 2002. Using the least squares dummy variable (LSDV) approach, we found that privatization did not have a significant impact on both economic growth and income inequality. However, good governance had a positive impact on economic growth and a negative impact on income inequality, while foreign direct investment (FDI) had a negligible impact on economic growth but a positive effect on income inequality. The findings of the study suggest that country-specific characteristics may be more important in promoting growth and reducing income inequality than any economic policy per se.

Suggested Citation

  • Samuel Adams & Berhanu Mengistu, 2008. "Privatization, Governance and Economic Development in Developing Countries," Journal of Developing Societies, , vol. 24(4), pages 415-438, October.
    • Handle: RePEc:sae:jodeso:v:24:y:2008:i:4:p:415-438
    DOI: 10.1177/0169796X0902400401
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    References listed on IDEAS

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    2. Mongi Chebli & Kais Saidi, 2024. "Economic Growth in Middle-Income Countries: The Role of Political Stability and Foreign Direct Investment," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 22(3), pages 641-665, September.
    3. Jianjun Kang & Delin Huang, 2023. "Examining the Effect of Privatization on Renewable Energy Consumption in the Digital Economy under Economic Patriotism: A Nonlinear Perspective," Sustainability, MDPI, vol. 15(7), pages 1-13, March.
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    5. Chebli Mongi & Kais Saidi, 2024. "The Impact of Corruption, Government Effectiveness, FDI, and GFC on Economic Growth: New Evidence from Global Panel of 48 Middle-Income Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 10696-10721, September.
    6. Huang, Chiung-Ju & Ho, Yuan-Hong, 2017. "Governance and economic growth in Asia," The North American Journal of Economics and Finance, Elsevier, vol. 39(C), pages 260-272.
    7. Sy-Hoa Ho & Rim Oueghlissi & Riadh El Ferktaji, 2024. "Testing for Causality Between Economic Growth and Environmental, Social, and Governance Performance: New Evidence from a Global Sample," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7769-7787, June.
    8. Polterovich (Полтерович), Victor (Виктор), 2012. "Приватизация И Рациональная Структура Собственности. Часть 1. Приватизация: Проблема Эффективности [Privatization and the rational ownership structure. Part 1: privatization: the effeciency problem," MPRA Paper 64145, University Library of Munich, Germany.
    9. Polterovich, V., 2013. "On Control of the Ownership Structure," Journal of the New Economic Association, New Economic Association, vol. 20(4), pages 177-182.
    10. Beatriz Cuadrado-Ballesteros & Noemí Peña-Miguel, 2018. "The Socioeconomic Consequences of Privatization: An Empirical Analysis for Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(1), pages 163-183, August.
    11. Marwa Khouya & Abdelhay Benabdelhadi, 2020. "Good Governance And Its Impact On Economic Development: A Systematic Literature Review," Post-Print hal-04063762, HAL.
    12. Polterovich, Victor, 2012. "Приватизация И Рациональная Структура Собственности. Часть 1. Приватизация: Проблема Эффективности [Privatization and the rational ownership structure. Part 1: privatization: the effeciency problem," MPRA Paper 64371, University Library of Munich, Germany.
    13. Qamar Abbas & Li Junqing & Muhammad Ramzan & Sumbal Fatima, 2021. "Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    14. Anis Chowdhury, 2012. "Structural Adjustment and Crises –Which Way Now?," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(1), pages 85-118, April.
    15. Zhang Zhuo & Almalki Sultan Musaad O & Bashir Muhammad & Sher Khan, 2021. "Underlying the Relationship Between Governance and Economic Growth in Developed Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(3), pages 1314-1330, September.
    16. Polterovich, Victor, 2012. "Приватизация и рациональная структура собственности (Privatizatsiya i ratsional’naya struktura sobstvennosti) [Privatization and the Rational Ownership Structure]," MPRA Paper 41069, University Library of Munich, Germany.

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