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Distributional Impact of Privatization

Feb 24, 2003

Privatization is contentious, especially when it touches water, electricity and transportation. Privatization impresses most economists and many policy makers, but the wider public fears that it raises prices, creates unemployment and hands over national assets to local elites, corrupt politicians, and foreign corporations. It may be good for the "economy"; it doesn't seem so for people. While the debate has been heated, the social consequences of privatization have not, to date, been extensively studied. From all sides of the debate, assertions and polemics rule the day.

The Center for Global Development, in conjunction with the Inter-American Development Bank, and with generous support from the Tinker Foundation and the Asian Development Bank, examined the impacts of privatization on the poor. Initial findings were presented in a two-day conference in Washington, on February 24-25, 2003. The conference commissioned case studies on Distributional impact of privatization in Bolivia, China, Georgia, Mexico, Russia, Sri Lanka and Ukraine, and offered a venue to similar work conducted in Latin America by the IADB.

Conference Summary
Speaker Biographies
Papers and Presentations
Privatization research in the news

SESSION 1: Welcome and Introduction

Welcome remarks by Nancy Birdsall and John Nellis, Center for Global Development, and Carlos Eduardo Velez, Inter-American Development Bank Introductory presentation by Nellis

SESSION 2: Distributional Effects of Infrastructure Privatization: Latin American Experience, Part 1 (The Case of Argentina and Bolivia)
Moderator: Carol Graham, Brookings Institution

The Distributive Impact of Privatization in Latin America: An Overview of Four Countries
Presented by Dilip Mookherjee, Boston University

Privatization and Income Distribution in Argentina
Presented by Huberto Ennis, Federal Reserve Bank, Richmond, and Santiago Pinto, West Virginia University

Capitalization and Privatization in Bolivia: An Approximation to an Evaluation
Presented by Gover Barja, Catholic University, La Paz (Bolivia)
Presentation

SESSION 3: Distributional Effects of Infrastructure Privatization: Latin American Experience, Part 2 (The case of Nicaragua)

Privatization, Inequality and Welfare: Evidence from Nicaragua
Presented by Luis Rivas, Ministry of Finance, Managua (Nicaragua)

Discussants (for both sessions 2 & 3): Comments from Antonio Estache, World Bank, and comments from Alberto Chong, Inter-American Development Bank

SESSION 4: Ownership Evolution in China
Moderator: Bert Keidel, U.S. Treasury

The Impact of Ownership Reform in Chinese Industry, 1995-2001
Presented by Gary Jefferson and Su Jian, Brandeis University

Discussants: Comments from Minxin Pei, Carnegie Endowment of International Peace, and comments from Bert Keidel, U.S. Treasury

SESSION 5: Distributional Impact of Privatization in Sri Lanka
Moderator: Alfonso Revollo, World Bank

Distributional Impact of Privatization: The Sri Lankan Experience
Presented by Malathy Knight-John, Institute for Policy Studies, Colombo (Sri Lanka)

Discussant: Comments from John Williamson, Institute for International Economics

SESSION 6: Distributional Consequences of Privatization in Transition States
Moderator: Christine Wallich, World Bank

Distributional Impact of Privatization in Russia
Presented by Louise Shelley, American University, on behalf of Svetlana Glinkina, Institute for International Economic and Political Studies, Russian Academy of Sciences, Moscow (Russia)

Forthcoming paper on privatization's impact in Georgia
Presented by Ambassador Kenneth Yalowitz, American and Georgetown Universities, based on a study by Roman Gotsiridze, Director of the Parliamentary Budget Office, Tblisi (Georgia)

The Effect of Privatization on Social Welfare in Ukraine: The Practical Experience of SigmaBleyzer
Presented by Michael Bleyzer and Edi Segura, SigmaBleyzer and The Bleyzer Foundation, Houston and Kiev
Presentation

Discussant: Comments from John Nellis, Center for Global Development

SESSION 7: Major Lessons: What's Next?

Concluding remarks from Navroz Dubash, World Resources Institute, Washington, DC; Stan Gacek, AFL-CIO; Elizabeth Williamson, The Washington Post; and Nancy Birdsall, President of the Center for Global Development

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Privatization research in the news:

The April newsletter of The International Budget Project of the Center for Budget and Policy Priorities, includes an article about the conference.

The March 2003 edition of Development Outreach includes an article by CGD Senior Fellow John Nellis and CGD President Nancy Birdsall about the distributional impacts of globalization.

On September 26, 2002, CGD President Nancy Birdsall and CGD Senior Fellow John Nellis, authored an opinion piece for the Christian Science Monitor discussing the varied effects of privatization.