Open Access Senior Thesis
Bachelor of Arts
© 2011 Alexander Sunderland
This paper examines the fiscal impact of privatization revenues in 47 developing countries. There are many reasons that privatization is attractive for the central government of developing countries. If substantial, these revenues from the sale of state owned enterprises can present a potential solution to persistent deficits. On the other hand, the privatization revenues could be used to finance an even larger deficit. In this paper, I will discuss previous research on the fiscal impact of privatization revenues, the factors that contribute to persistent fiscal budget deficits and explain how empirical research on the fiscal impact of privatization in the developing world is a logical extension of this research. Using data from the World Bank’s Privatization Database on privatization revenues from the years 1988 to 2008 and panel data techniques, I find that an increase in privatization revenues is correlated with a worsening of the fiscal budget balance, lending support to the hypothesis that revenues from the sales of state owned enterprises are used to finance a larger deficit.
Sunderland, Alexander H., "Fiscal Impact of Privatization in Developing Countries" (2011). CMC Senior Theses. 109.