Everyone Hates Privatization, but Why? Survey Evidence from 28 Post-communist Countries

Irina Denisova (New Economic School)
Markus Eller (Oesterreichische Nationalbank)
Timothy Frye (Columbia University)
Ekaterina Zhuravskaya (New Economic School)

Abstract: A 2006 survey of 28,000 individuals in 28 post-communist countries reveals overwhelming support for revising privatization, but also that most respondents prefer to leave firms in private hands. We test whether individuals support revising privatization primarily due to a preference for state property or due to concerns about the legitimacy of privatization. We find that a lack of human capital and privately owned assets affects the support for revising privatization primarily via a preference for state property over private property; whereas transition-related hardships influence support for revising privatization via both a preference for state property and concerns about the illegitimacy of privatization. These results suggest the value of analyses that not only link respondent traits with support for policy, but that also probe the motivations that underpin this support.

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