Evidenceon the Fiscal and Macroeconomic Impact of Privatization

July 1, 2000

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Format: Chicago

Steven A Barnett. Evidenceon the Fiscal and Macroeconomic Impact of Privatization, (USA: International Monetary Fund, 2000) accessed September 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper empirically investigates the relationship between privatization and measures of fiscal and macroeconomic performance. One of the main findings is that privatization proceeds transferred to the budget tend to be saved. Specifically, they are largely used to reduce domestic financing, with little evidence that they are used to finance a larger deficit. However, by construction, this part of the study is restricted to privatization proceeds transferred to the budget, leaving open the question of what happens to those proceeds not transferred to the budget. The other main finding is that total privatization (as opposed to just the proceeds transferred to the budget) is correlated with an improvement in macroeconomic performance as manifested in higher real GDP growth and lower unemployment. However, this result needs to be interpreted cautiously as the evidence is not sufficient to establish causality.

Subject: Budget planning and preparation, Economic sectors, Labor, Privatization, Public financial management (PFM), Revenue administration, Unemployment, Unemployment rate

Keywords: Budget planning and preparation, Privatization, Privatization coefficient, Privatization proceeds, Privatization process, Privatization yield result, Proceeds, Unemployment, Unemployment rate, Viewing privatization, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2000/130
Stock No:

WPIEA1302000
ISBN:

9781451855180
ISSN:

1018-5941

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