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Empirical Evidence on Satisfaction with Privatization in Latin America: Welfare Effects and Beliefs

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  • Bonnet, Céline
  • Dubois, Pierre
  • Martimort, David
  • Straub, Stéphane

Abstract

Since the 1980s, privatization of formerly state-owned firms has been extensively implemented by governments across Latin America. Despite the fact that most evaluations of the process fail to find significant adverse welfare effects, there has been a strong surge in public discontent with such policy in the region. This paper performs a systematic empirical analysis of the determinants of such discontent with privatizations in Latin America, using survey data from Latinobarometro covering 18 countries over the period 1995-2005, complemented by country level data on macroeconomic, political, and institutional aspects as well as data on privatization. Dissatisfaction appears to respond to absolute and relative welfare effects, as well as to individual beliefs and expectations.

Suggested Citation

  • Bonnet, Céline & Dubois, Pierre & Martimort, David & Straub, Stéphane, 2009. "Empirical Evidence on Satisfaction with Privatization in Latin America: Welfare Effects and Beliefs," TSE Working Papers 09-020, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:21936
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    2. Di Tella, Rafael & Galiani, Sebastian & Schargrodsky, Ernesto, 2012. "Reality versus propaganda in the formation of beliefs about privatization," Journal of Public Economics, Elsevier, vol. 96(5), pages 553-567.
    3. Claude Ménard & Aleksandra Peeroo, 2011. "Liberalization in the Water Sector: Three Leading Models," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 18, Edward Elgar Publishing.
    4. Straub, Stéphane, 2009. "Governance in Water Supply," IDEI Working Papers 544, Institut d'Économie Industrielle (IDEI), Toulouse.
    5. Santap Sanhari Mishra & Seifu Bekuretsion, 2020. "Roles of Transparency and Trust in the Relationship between Privatization and Customers’ Satisfaction in Ethiopia: Results of Structural Equation Modelling," Public Organization Review, Springer, vol. 20(4), pages 753-769, December.
    6. Auriol, Emmanuelle & Blanc, Aymeric, 2009. "Capture and corruption in public utilities: The cases of water and electricity in Sub-Saharan Africa," Utilities Policy, Elsevier, vol. 17(2), pages 203-216, June.
    7. Del Bo, Chiara D. & Ferraris, Matteo & Florio, Massimo, 2017. "Governments in the market for corporate control: Evidence from M&A deals involving state-owned enterprises," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 89-109.

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    More about this item

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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