The political economy of privatization and deregulation

In The Political Economy of Privatization the authors assess the success of privatization. The work is an international study of the extensive privatization, and the pressure towards privatization, in different parts of the world. The book includes: \* A study of the relationship between ownership and performance; \* An assessment of the importance of market structure and regulation; \* A discussion of privatization strategies within the public sector; \* Individual country case-studies, looking at the experience of different countries engaged in the contrasting approaches to privatization. \* A critical assessment of the much vaunted relationship between ownership and efficiency. Book Cover......Page 1 Title......Page 3 Copyright......Page 4 CONTENTS......Page 5 FIGURES......Page 7 TABLES......Page 8 CONTRIBUTORS......Page 10 PREFACE......Page 11 THE CASE FOR PRIVATE OWNERSHIP......Page 12 THE FAILURES OF THE MARKET......Page 13 THE REASONS FOR PRIVATIZATION......Page 15 OWNERSHIP AND PERFORMANCE......Page 16 MARKET STRUCTURE AND REGULATION......Page 17 PRIVATIZATION STRATEGIES WITHIN THE PUBLIC SECTOR......Page 18 PRIVATIZATION IN ADVANCED INDUSTRIAL ECONOMIES......Page 19 PRIVATIZATION IN EASTERN EUROPE......Page 23 PRIVATIZATION IN DEVELOPING COUNTRIES......Page 24 BIBLIOGRAPHY......Page 25 Part I OWNERSHIP AND PERFORMANCE......Page 27 TESTING FOR PERFORMANCE CHANGES......Page 28 Financial ratios......Page 31 EXPLORING THE INTERNAL ENVIRONMENT......Page 32 Organizational structure......Page 33 Management......Page 34 Royal Mint......Page 35 Rolls-Royce......Page 36 British Airways......Page 37 CONCLUSIONS......Page 38 REFERENCES......Page 40 Residual claimant theory......Page 42 Concluding remarks......Page 44 Static efficiency: budget constraint......Page 45 ON THE QUESTION OF TRANSITION: MARKET SOCIALISM?......Page 46 THE POLITICAL ECONOMY OF OWNERSHIP......Page 47 NOTES......Page 48 BIBLIOGRAPHY......Page 49 INTRODUCTION......Page 51 OWNERSHIP AND MARKET STRUCTURE......Page 52 EC POLICY TOWARDS PUBLIC OWNERSHIP......Page 53 THE EC ESI......Page 55 THE EC ATI......Page 58 CONCLUSIONS......Page 60 BIBLIOGRAPHY......Page 61 Part II MARKET STRUCTURE AND REGULATION......Page 63 STRUCTURE OF UK ELECTRICITY SUPPLY......Page 64 THE ECONOMICS OF REGULATION......Page 66 REGULATORY INSTRUMENTS IN THE UK ELECTRICITY SUPPLY INDUSTRY......Page 68 PRICE-CAPPING......Page 69 REGULATORY REVIEW AND THE X-FACTOR......Page 70 REFERENCES......Page 72 INTRODUCTION......Page 73 MARKET STRUCTURE AND PRIVATIZATION......Page 74 THE PRIVATIZATION OF BRITISH GAS......Page 76 ABUSES OF MARKET POWER......Page 77 Pipelines and common carrier rules......Page 78 COMPETITION REVIEW......Page 79 BIBLIOGRAPHY......Page 81 INTRODUCTION......Page 83 The industrial relations consequences of regulation......Page 84 The industrial relations consequences of the City......Page 85 DIVERSIFICATION OUT OF ‘CORE’ SERVICES AND ITS IMPLICATIONS FOR INDUSTRIAL RELATIONS......Page 86 CHANGING MANAGEMENT CULTURE AND INDUSTRIAL RELATIONS: THE EXAMPLE OF DECENTRALIZATION......Page 88 CONCLUSIONS......Page 90 REFERENCES......Page 91 Part III PRIVATIZATION STRATEGIES WITHIN THE PUBLIC SECTOR......Page 93 CCT AND LOCAL AUTHORITIES: THE LEGISLATION......Page 94 ARGUMENTS SURROUNDING COMPETITIVE TENDERING......Page 95 ANALYSING THE DATA......Page 96 Does CT result in cost savings?......Page 97 A FRAMEWORK FOR ANALYSIS......Page 98 External......Page 99 Empirical analysis......Page 100 BIBLIOGRAPHY......Page 101 INTRODUCTION......Page 102 PUBLIC PROCUREMENT LEGISLATION AND UK LOCAL AUTHORITIES......Page 103 DIFFERENT STARTING POINTS FOR EC AND UK LEGISLATION......Page 104 ATTRACTING EUROPEAN CONTRACTORS TO UK LOCAL AUTHORITY MARKETS......Page 106 Local authority construction and the EC Works Directive......Page 107 Local authority supplies purchasing and the EC Directives......Page 108 Service industries and the EC Directives......Page 109 Building cleaning......Page 110 Refuse collection and street cleaning......Page 111 Multinationals in the service sector......Page 113 THE FUTURE: TENSIONS AND EXTENSIONS......Page 114 BIBLIOGRAPHY......Page 115 INTRODUCTION......Page 117 FROM CORPORATE RATIONALIZATION TO MARKET DECENTRALIZATION......Page 118 FROM COLLABORATION TO CONTROL......Page 120 MANAGERIAL CULTURE AND ORGANIZATIONAL ORDER......Page 122 INSTITUTIONAL MANAGEMENT AND HEALTH-CARE PRACTICE......Page 124 BIBLIOGRAPHY......Page 125 Part IV PRIVATIZATION IN ADVANCED INDUSTRIAL ECONOMIES......Page 127 POST-FACTUM POLICY-MAKING......Page 128 A PRIVATIZATION STRATEGY?......Page 129 COMPETITION AND EFFICIENCY?......Page 132 PRIVATIZATION IN PRACTICE?......Page 134 A SHAREHOLDER DEMOCRACY?......Page 135 A CONSUMERS’ DEMOCRACY?......Page 137 WORKER OWNERS?......Page 138 THE STRUCTURAL LIMITS TO PRIVATIZATION: UP AGAINST THE BUFFERS?......Page 140 PRIVATIZATION AND THE REFORM OF THE PUBLIC SECTOR......Page 141 CONCLUSIONS......Page 142 BIBLIOGRAPHY......Page 143 12 CONTEXT AND PROCESS IN PRIVATIZATION:......Page 145 CONTEXT: ORIGINS AND SCOPE OF PUBLIC ENTERPRISE IN CANADA......Page 146 Canada: problems of control and accountability......Page 148 Quebec: problems of changed goals and large losses......Page 149 Federal Level: decentralized divestment and learning over time......Page 150 Context......Page 151 Process......Page 153 Outcomes at the federal level......Page 154 Conclusion: comparing the federal and provincial divestment programmes......Page 156 Sidbec-Normines (SN)......Page 157 Quebecair......Page 158 Canadair......Page 159 Teleglobe Canada......Page 160 Air Canada......Page 161 NOTES......Page 162 REFERENCES......Page 164 INTRODUCTION......Page 167 SOME INSTITUTIONAL FEATURES: THE DISTRIBUTION AND THE INDIRECT NATURE OF STATE PROPERTY RIGHTS......Page 168 DEVELOPMENT OF PRIVATE AND PUBLIC SECTOR COMPANIES IN ITALY......Page 169 RECENT ECONOMIC RESULTS......Page 173 Investment activity by leading groups in Italy: state-owned versus private groups?......Page 175 Financial resources of private—public sectors......Page 180 ITALIAN PRIVATIZATION PROCESSES......Page 181 A measure of privatization processes......Page 184 CONCLUDING REMARKS......Page 185 NOTES......Page 186 REFERENCES......Page 188 14 CORPORATIZATION AND PRIVATIZATION IN NEW ZEALAND......Page 190 THE POLICY OF CORPORATIZATION......Page 191 UNDERLYING THEORETICAL THINKING......Page 193 THE PROCESS OF CORPORATIZATION......Page 194 THE POLICY OF PRIVATIZATION......Page 197 THE PRIVATIZATION PROCESS......Page 198 THE OPERATING ENVIRONMENT......Page 200 COMPANY RESTRUCTURING......Page 201 THE PERFORMANCE OF STATE ENTERPRISES......Page 202 BROADER ECONOMIC EFFECTS......Page 203 APPENDIX: LIST OF NEW ZEALAND ECONOMIC LIBERALIZATION MEASURES......Page 204 NOTES......Page 205 THE BACKGROUND......Page 207 OPINIONS FOR AND AGAINST THE PRIVATIZATION OF JNR......Page 208 THE PROCESS OF THE PRIVATIZATION......Page 209 THE EFFECT OF THE PRIVATIZATION ON JR’S MANAGEMENT......Page 213 THE EFFECT OF PRIVATIZATION ON THE TRANSPORT MARKET......Page 215 Allocation of resources......Page 216 THE UNSOLVED PROBLEMS......Page 217 BIBLIOGRAPHY......Page 220 BACKGROUND AND RATIONALE TO PRIVATIZATION AND DEREGULATION POLICIES......Page 221 OPTIMAL PRIVATIZATION STRATEGIES......Page 223 Discussion of proposition 1......Page 224 Proposition 2......Page 225 REFERENCES......Page 226 Part V PRIVATIZATION IN EASTERN EUROPE......Page 227 SYSTEM-SPECIFIC ARGUMENTS FOR PRIVATIZATION IN SOCIALIST ECONOMIES......Page 228 THE RESILIENCE OF PRIVATE OWNERSHIP......Page 229 OWNERSHIP AND ENTREPRENEURSHIP......Page 230 GENERAL ISSUES: SUBJECTIVIZATION......Page 231 PRIVATIZATION IN THE REFORM SEQUENCE......Page 232 POLISH PRIVATIZATION: DEBATES AND PRACTICE......Page 233 THE NEW POLISH LAW ON PRIVATIZATION (JULY 1990)......Page 234 NOTES......Page 235 BIBLIOGRAPHY......Page 236 PRIVATIZATION: THE FIRST PHASE......Page 238 ‘SPONTANEOUS’ PRIVATIZATION—THE PRACTICE......Page 239 SPONTANEOUS PRIVATIZATION—THE DEBATE......Page 241 THE STATE PRIVATIZATION AGENCY......Page 242 PRIVATIZATION: THE DEVELOPMENT OF A PRIVATE SECTOR......Page 244 CONCLUSIONS......Page 248 REFERENCES......Page 249 RESTRUCTURING AND PRIVATIZATION IN THE USSR......Page 250 BUY-OUTS AND PRIVATIZATION IN THE WEST......Page 251 Problems with USSR privatization......Page 254 The form of privatization......Page 256 BUY-OUTS IN THE USSR......Page 257 Leased enterprises......Page 258 The performance of MBOs in the USSR......Page 259 The future for BOs in the USSR......Page 260 CONCLUSIONS......Page 261 BIBLIOGRAPHY......Page 262 Part VI PRIVATIZATION IN DEVELOPING COUNTRIES......Page 264 20 PRIVATIZATION IN MALAYSIA......Page 265 THE MEANING OF PRIVATIZATION......Page 266 TYPES OF PRIVATIZATION......Page 267 THE RATIONALE FOR PRIVATIZATION......Page 269 APPENDIX: THE NORTH-SOUTH HIGHWAY PRIVATIZATION......Page 273 BIBLIOGRAPHY......Page 274 The ownership question......Page 275 The provision of finance......Page 276 Disposal of public assets......Page 277 The Arusha Declaration: background to the socialization programme......Page 278 The disruption of agriculture: villagization and non-individual ownership......Page 279 Public sector retrenchment and possible political resistance......Page 280 Trade union attitudes to privatization......Page 282 The rediscovery of the virtues of private investment......Page 283 Import-substituting industrialization and indebtedness......Page 284 NOTES......Page 285 REFERENCES......Page 286 INDEX......Page 287

The Political Economy of Privatization draws together substantial evidence and puts forth an analysis of the experience of privatization programs in practice over the last ten years. The papers included in this volume assess the different means of implementing privatization policies and analyse the impact on the economy.

The work is an international study of a wide range of topics including the extensive privatization of the public sector in advanced industrial countries, the rapid marketization of the Eastern European countries and the pressures upon developing countries to adopt de-regulation and privatization as the route toward economic growth. The results demonstrate that privatization can take many forms, from wholesale denationalization to the contracting of competitive tendering. The impact upon government, consumers, managers and employees is also explored and the much vaunted relationship between private ownership and efficiency is critically assessed.

Booknews

The Scotland conference at which these 21 papers were originally presented was delayed by the coup in Russia, underscoring the volatile relationship of politics and economics which has been fueled by rapid market growth in Eastern Europe and the touting of privatization as the solution for reviving prosperity. These contributors critically examine such assumptions in the areas of ownership, performance, regulation, and privatization strategies in the UK, New Zealand, Japan, Hungary, Poland, Russia, Malaysia, and Tanzania. Not surprisingly, the conclusions regarding private sector efficiency and effectiveness are as varied as the political stabilities in each country. Annotation c. Book News, Inc., Portland, OR (booknews.com)

This collection of important previously published articles reflects the vigorous implementation of privatization in Europe and the deregulation in the United States over the last quarter century. Deregulation and privatization are bound together by the economic, political and intellectual underpinnings that gave rise to their implementation.