Study on the impact of privatization

Region: Global
Country: Global

ASI conducted a study for the Development Assistance Committee of the OECD into the impact of privatization in developing and post-communist countries. The study looked at the actual results of privatization in terms of impact on company performance, government finances, investment, employment, and consumers.
The study found that privatization has done much to strengthen capital markets and widen the ownership of capital, although such effects are closely related to the methods of privatization pursued by individual countries. Those countries which have concentrated on trade sales to foreign investors have been unable to capture such benefits. However, those countries which have sought to put shares of privatized companies in the hands of large numbers of citizens, such as the cited examples of Jamaica, Chile, Mexico, Nigeria, Poland and the Czech and Slovak Republics, have been able to strengthen their capital markets considerably and create or extend a large group of share owners.
Although sale to foreign investors does not bring wider share ownership, it often brings the management expertise, access to technology and the investment that are required to improve enterprise performance.  Here, as in other areas, there are conflicts between different privatization objectives, the study noted.