Focusing on developing countries which have recently experienced political and economic transitions, we study how income inequality is related to privatization in the light of the democratization process. We find that a marginal increase in privatization revenue is positively and significantly correlated with a rise in the level of inequality in the income distribution only when the protection of the civil liberties and the guarantee of the political rights are not widely ensured to all citizens. Then, our evidence suggests an interesting policy implication concerning the timing of democratization and privatization in developing countries: only when the democratization process is well developed, privatization can be implemented safely from an equity point of view.
The Distributional Impact of Privatization in Developing Countries: the Role of Democratic Institutions
SCABROSETTI, SIMONA
2013-01-01
Abstract
Focusing on developing countries which have recently experienced political and economic transitions, we study how income inequality is related to privatization in the light of the democratization process. We find that a marginal increase in privatization revenue is positively and significantly correlated with a rise in the level of inequality in the income distribution only when the protection of the civil liberties and the guarantee of the political rights are not widely ensured to all citizens. Then, our evidence suggests an interesting policy implication concerning the timing of democratization and privatization in developing countries: only when the democratization process is well developed, privatization can be implemented safely from an equity point of view.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
