Institutional preconditions of privatization in market‐based political economies: Implications for Jordan
| DOI | http://doi.org/10.1002/pad.4230140105 |
| Published date | 02 November 2006 |
| Author | Margaret F. Reid |
| Date | 02 November 2006 |
PUBLIC ADMINISTRATION AND DEVELOPMENT, VOL. 14,65-77 (1994)
Institutional preconditions of privatization in market-based
political economies: implications for Jordan
MARGARET
F.
REID
Department
of
Political Science, University
of
Louisville
SUMMARY
Concepts of privatization have been adopted on a global scale. Yet few studies examine
issues other than economic and selected political ones. This article argues, however, that
a broad spectrum of institutional considerations must be evaluated in order to assess the
viability of any proposed privatization strategy.
A
further distinction must be made between
countries with developed markets and those market-based political economies
(MBPEs)
whose
extant institutional configurations have not reached a level of independence to fully support
extensive privatization measures. Jordan, Turkey and Egypt would be examples
of
such coun-
tries.
This article contends that the enactment and implementation of privatization policies will
achieve its avowed goals only (a) if the state-controlled enterprises (SCEs) are sufficiently
independent of their supervising bureaucracies (presumably a ministry, the treasury
or
develop-
ment planning organization) prior to their transfer to a private partner and (b) if the govern-
ment possesses requisite monitoring capacity to ensure the fulfilment of contractual obligations
of
the privatized entity. An ancillary thesis suggests that the societal and organizational culture
must be succinctly separated to warrant
a
full-scale transfer of SCEs
to
the private sector.
In Jordan, privatization has been discussed for
a
number of years, but no projects have
been attempted
so
far. The article assesses the likelihood of large-scale privatization occurring
soon.
INTRODUCTION
Varying concepts
of
privatization have been debated and adopted on a global scale,
yet few studies examine issues other than economic and selected political ones. This
paper argues, however, that a broad spectrum
of
institutional considerations must
be evaluated in order to assess the viability
of
any proposed privatization strategy.
Furthermore,
a
distinction must be made between countries with developed markets
and those market-based political economies (MBPEs) whose extant institutional con-
figurations have not reached a level
of
independence capable
of
fully supporting
extensive privatization measures. Jordan, Turkey, and Egypt are examples
of
such
countries in the Near East.
MBPEs display considerable complexity in their institutional arrangements. The
linkage mechanisms that exist between political, economic and administrative
decision-making bodies and the commensurate rules that guide human behaviour
in such organizational arrangements are sufficiently volatile, however, to render them
more susceptible to both external and internal economic and political factors.
Dr Reid is in the Department
of
Political Science, University
of
Louisville, Louisville,
KY
40292, USA.
CCC 0271-2075/94/010065-13
0
1994 by John Wiley
&
Sons, Ltd.
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