Reality Check: The Distributional Impact of Privatization
in Developing Countries

John Nellis and Nancy Birdsall, eds.

10/17/2005

"Most studies of privatization look at what happens to companies; this volume looks at what happens to people—workers, consumers, and the disadvantaged. This is progress."
-Joseph Stiglitz, Professor, Columbia University

"Politically, privatization has always been a difficult sell: Critics claim it rewards the wealthy and the foreign at the expense of the poor and local. The studies in this book show this is not the case: privatization’s reputation is largely undeserved."
-Pedro-Pablo Kuczynski, Minister of Economy and Finance of Peru

On October 20, 2005 CGD hosted a public book launch featuring a presentation by the editors of Reality Check and commentary by Jim Adams, Vice President for Operations Policy and Country Services, World Bank.  
Download John Nellis' presentation slides from the event (PDF)

The privatization of state-owned enterprises has been among the most controversial of market reforms. This new edited volume brings together a comprehensive set of country studies on the effects of privatization on people—and answers the overarching question: who are the winners and losers of the wave of privatizations that swept across the developing world in the 1980s and 1990s?

The studies are sophisticated and careful, and address the big questions: Are the poorest households paying more for water, power, and other basic services? Did those who lost jobs suffer permanent declines in income? Were state assets sold at prices that were too low, and who benefited from the resulting windfalls? Was the process, in laypersons’ terms, "fair"?

Some readers will be surprised at the general conclusion: that privatization has, in many cases, been a reasonably good thing, and not only for the rich. Others will be surprised at its limited effects. As privatization remains on the policy agenda despite public resistance and continuing controversy, almost all readers will want to understand the potential of privatization to stimulate competition while at the same time being fundamentally more just and fair.

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Download chapters of Reality Check:

Table of Contents (PDF)
Preface (PDF)
Chapter 1: Privatization Reality Check: Distributional Effects on Developing Countries (PDF)
Chapter 2: Paradox and Perception: Evidence from Four Latin American Countries (PDF)
Chapter 3: Inequality and Welfare Changes: Evidence from Nicaragua (PDF)
Chapter 4: Bolivian Capitalization and Privatization (PDF)
Chapter 5: Argentina's Privatization: Effects on Income Distribution (PDF)
Chapter 6: Peru after Privatization: Are Telephone Consumers Better Off? (PDF)
Chapter 7: Distribution of Assets and Income in Brazil: New Evidence (PDF)
Chapter 8: Latin America's Infrastructure Experience: Policy Gaps and the Poor (PDF)
Chapter 9: Outcomes of the Russian Model (PDF)
Chapter 10: Privatization's Effects on Social Welfare in Ukraine (PDF)
Chapter 11: China's Shareholding Reform: Effects on Enterprise Performance (PDF)
Chapter 12: Rethinking Privatization in Sri Lanka (PDF)

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Read a Related CGD Working Paper:
Winners and Losers: Assessing the Distributional Impacts of Privatization

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