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Privatization: Successes and Failures (Initiative for Policy Dialogue at Columbia: Challenges in Development and Globalization)
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Review
This book should be compulsory reading. (Paul Sweeney Irish Times)An extremely valuable monograph... Highly recommended. (Choice)
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About the Author
Gérard Roland is professor of economics and political science at the University of California, Berkeley. A leading expert in the field of transition economics and institutional change, he is the author of Transition and Economics: Politics, Markets, and Firms.Joseph E. Stiglitz is University Professor at Columbia University and former chief economist and senior vice president of the World Bank. Among his books are Escaping the Resource Curse and Globalization and Its Discontents, which has been translated into twenty-eight languages. In 2001 he was awarded the Nobel Prize in economics.
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Product details
Series: Initiative for Policy Dialogue at Columbia: Challenges in Development and Globalization
Hardcover: 256 pages
Publisher: Columbia University Press (June 23, 2008)
Language: English
ISBN-10: 0231141602
ISBN-13: 978-0231141604
Product Dimensions:
6 x 1 x 9 inches
Shipping Weight: 15.2 ounces (View shipping rates and policies)
Average Customer Review:
2.0 out of 5 stars
1 customer review
Amazon Best Sellers Rank:
#2,758,809 in Books (See Top 100 in Books)
Converting state-owned enterprises into privately managed assets became part of policy prescriptions for developing countries. However, it has often turned out to be more disappointing than expected, and generated great social unrest in a few instances. 'Privatization' presents an overview by some of the world's foremost experts on the topic.Joseph Stiglitz tells us that while critics of SOEs argue they're subject to corruption, a more serious corruption problem arises in the privatization process. Further, while benchmarking can control the extent of abuse in running SOEs, it is more difficult to do so in the privatization process. In Russia it became clear that auctions can be rigged by settling the rules. Other privatization failures occurred when natural monopolies were privatized before regulatory and antitrust systems were in place - Mexico's telecommunications sector is an example, creating one of the richest men in the world but not helping Mexico's development.It would be easy, but incorrect, to suggest that it was poor SOE management that motivated privatization. The IMF pushed Korea to privatize its state-run steel company, markedly more efficient than many privately run steel companies in the U.S. U.S. Republicans have pushed to privatize social security, even though its transaction costs were far lower than those in any private sector firm - Wall Street would gain from those increased costs.One of the most highly publicized cases was the Cochabamba water concession in Bolivia. Subsidies were eliminated and the price of water tripled in January 2000 - average $20/month, vs. average income of $100/month. A driving factor was the need to pay for construction of a dam, tunnel, and water purification plant to boost water supplies. The program was repealed after the protests. (This example does not seem appropriate - capital was sorely needed to increase availability, and either increased subsidies or rate hikes were necessary, privatization or not.)Overall, the scope of the book is too limited and at least one of its major examples should not have been utilized; similarly, the book failed to detail how privatization of Mexico's telecommunications system became abused. Worst, the material lacked a useful summary.
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