Common prerequisites and measures of performance for successful privatization

Abstract

Purpose

The purpose of this paper is to evaluate the success of privatization based on the performance of relevant macroeconomic variables before and after privatization.

Design/methodology/approach

Using the labor market and economic indicators in Latin America and the Caribbean during 1990‐2002 and 1993‐2004, the researchers investigate whether different stabilization and liberalization strategies and the industry sequencing result in different macroeconomic performance for transition and emerging economies.

Findings

The results of this study revealed that based on the changes in macroeconomic variables, privatization in Latin America and the Caribbean failed to meet its intended goals, and successful privatization plan is indeed related to appropriate economic reform and effective macroeconomic stabilization policies.

Practical implications

This research leads to the conclusion that macroeconomic stabilization, industry sequencing and market liberalization are necessary prerequisites for a fair, equitable and transparent privatization process.

Originality/value

The study provides useful information on privatization, economic reform and effective macroeconomic stabilization policies with an emphasis on Latin America and the Caribbean.

Citation

Ashkeboussi, R. and Tootoonchi, A. (2007), "Common prerequisites and measures of performance for successful privatization", International Journal of Commerce and Management, Vol. 17 No. 3, pp. 211-238. https://doi.org/10.1108/10569210710833626