Waiting for privatization in developing countries: Towards the integration of economic and non‐economic explanations
| Author | Martin Minogue,Paul Cook |
| DOI | http://doi.org/10.1002/pad.4230100403 |
| Date | 01 October 1990 |
| Published date | 01 October 1990 |
PUBLIC ADMINISTRATION AND DEVELOPMENT, Vol. 10,389403 (1990)
Waiting
for
privatization
in
developing countries: towards the
integration
of
economic and non-economic explanations
PAUL COOK and MARTIN MINOGUE
University
of
Manchester
SUMMARY
The intention of this paper is to examine the political and administrative limits on the effective
implementation
of
privatization in developing countries and
so
to present a challenge to
the view that slow progress is primarily attributable to economic constraints. After examining
these economic aspects, the paper provides an explanatory framework which incorporates
those political and administrative processes central to an understanding of what happens
to state economic policies
in
practice. The significance of these processes is demonstrated
by drawing on research material from India, Pakistan, Thailand, and Sri Lanka. The conclusion
drawn is that responses to pressures
for
economic reform will be determined, not
so
much
by economic criteria as by the political and bureaucratic resources available to decision makers.
Since policy processes
in
developing countries show considerable variety
it
is likely that there
will
be substantial variations
in
the practical achievement of privatization objectives.
INTRODUCTION
Considerable* attention is currently being given to privatization in developing coun-
tries, yet most commentators agree that there has been relatively little implementation
in practice (Killick and Commander, 1988; Cook and Kirkpatrick, 1988; Nellis,
1986). The debate focuses on the significance of economic factors in determining
the success or failure of privatization policies; for example,
a
recent survey concludes
that ‘the stock market is not likely to be
a
vehicle for the implementation of privatisa-
tion in LDCs’ (Bienen and Waterbury, 1989, p. 620) but goes on to imply that
implementation will be effective where local capital markets can be strengthened.
The problem with this approach, and its implicit policy, is that it underestimates
the complexity of economic policy making in the real political environment. Our
concern in this article is to restore to the centre-stage discussion
of
the political
and administrative influences since these are crucial determinants in the implemen-
tation
of
state economic policies. While the need to balance and integrate economic
and non-economic factors is often recognized, it is too often the case that the analysis
of non-economic factors is too narrowly formulated or imprecise. Neither policy
nor explanation can be adequate without due recognition of the political and adminis-
trative realities which condition the effectiveness of economic policy reforms in de-
*Paul
Cook
is at the Institute
for
Development Policy and Management, and Martin Minogue at the
International Development Centre, both at the University
of
Manchester, Manchester MI3 9PL,
U.K.
027 1-2075/90/040389-1
S05.00
0
1990
by
John Wiley
&
Sons, Ltd.
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