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.