Privatization-liberalization Paths. Does Partisanship Matter?

Belloc Filippo (Dept. Economics University of Siena Italy)
Nicita Antonio (Dept. Economics University of Siena Italy)

Abstract: We investigate the role of political determinants of deregulation policies in thirty OECD network industries, unbundling privatization and liberalization decisions. Contrary to conventional wisdom, we find that both right-wing and left-wing governments promote a policy mix of liberalization and privatization policies. Moreover, deregulation is implemented on average by smooth gradualism rather than by big-bang. However, while left-oriented governments show a positive and statistically significant preference towards liberalization over privatization, the opposite is shown for right-wing governments. The observed sequencing of liberalization-privatization paths confirms our results. We then argue that political determinants in a country turns out to be a prerequisite to predicting its evolution in terms of liberalization-privatization patterns.

Download the paper