The case for privatization, whether defined in a broad or narrow sense, has been forcefully made by its advocates against the backdrop of the much advertised poor performances of state-owned enterprises (SOEs) and theoretical arguments relating to the efficiency of private firms over public enterprises. Consequently, privatization and commercialization have been key components of the structural adjustment programmes foisted by the Bretton Woods institutions on Third World countries. Yet, the empirical findings on privatization, especially outside Africa where they exist, do not portray the strategy to be a panacea that works in all circumstances in all branches of economic activity. In spite of this, since the late 1980s, privatization has been stepped up in almost all African countries. And after about two decades of vigorous implementation of privatization programmes in Africa, there is a compelling need for a comprehensive and systematic analysis of various privatization issues, particularly the economic and social impact. This book thus establishes a clear case for a comprehensive and systematic analysis of the impact of privatization in Africa. Specifically, the book provides a state-of-the art review of privatization issues and research questions as a prelude to an in-depth study of the economic and social impact of privatization. In the light of the rich insights brought to bear on the issues, this book should stimulate the interest of researchers, donors and policy makers to undertake or support the follow-up in-depth research envisaged.

In the context of the privatisation debate, the neoclassical analysis translates into policy pres- criptions directed towards a reduction in the size of the public sector, the removal of government controls, the fostering of competition, and a greater reliance on the market and price mechanism for the allocation of resources (Cook and Kirkpatrick 1988: 9). [...] Fine (2005), points to the bias in the approach of the OECD and the World Bank in favour of market provision, even as the deficiencies of the market are increasingly being recognised as an obstacle to further privatisation itself, and advocates extension of the system of public service provision (SOP) approach from (private) consumption to public services. [...] Mana- gement of contracts involve the use of management expertise from the private sector to manage government entities through the payment of a fee; • Transferring of the provision of a good or service from the public to the private sector while the government retains the ultimate responsibility for supplying the service; for example, franchising or contracting out of pu- blic service and leasing. [...] In the literature, the Obadan 281008.pmd 28/10/2008, 12:0035 The Economic and Social Impact of Privatisation in Africa 36 main approach suggested in dealing with the above problem relates to the creation of financial intermediaries that would hold shares in the individual enterprises with the public in turn owning the equity of these intermediaries. [...] The first, as was noted before, relates to the underdeveloped nature of the capital market in the developing countries, in terms of the size of the market available to a divesting authority, limited capitalisation and number of traded issues.

Provides a state-of-the art review of privatization issues and research questions as a prelude to an in-depth study of the economic and social impact of privatization.

The privatization of large state-owned enterprises is one of the most radical policy developments of the last quarter century. Right-wing governments have privatized in an effort to decrease the size of government, while left-wing governments have privatized either to compensate for the failures of state-owned firms or to generate revenues. In this way, privatization has spread from Europe to Latin America, from Asia to Africa, reaching its zenith with Central and Eastern Europe's transition from socialism to capitalism. In many countries state ownership has been an important tool in bringing cheap water, energy, and transport to poorer segments of the population. In other instances, it has sponsored aggressive cutbacks, corruption, and cronyism. Privatization: Successes and Failures evaluates the practices and results of privatization in Eastern Europe, Africa, Latin America, and Asia. Featuring the world's leading economists and experts on privatization, this volume offers a broad and balanced analysis of specific privatization projects and uncovers some surprising trends. Partial privatization, for example, tends to be more widespread than one might think, and the effects of privatization on efficiency are generally mixed but rarely negative. Also, while privatization appears uncontroversial in competitive sectors, it becomes increasingly complex in more monopolistic sectors where good regulation is crucial. Privatization concludes with alternative frameworks for countries in Africa and other regions that seek to develop privatization policy and programs.

This book intends to provide a continuous assessment of the crisis in governance in Africa. As it is, there are huge deficits in the capacity of African states to harness vast human and material resources to promote good governance. This manifests in pervasive corruption, collapsed service delivery, collapsed state-owned enterprises, eroded social trust, capital flight, escalating levels of poverty and wars, human insecurity, and stunted growth. The public sector is the pulse of service delivery because the entire governance system revolves around the sourcing of materials and services, mostly from the private sector, in order to achieve its public policy intents. The procurement process, therefore, ordinarily ought to yield positive economic outcomes and an efficiency-driven system in favour of the government itself and its service recipients. However, this more often than not is not the case. Despite its enormous wealth, the African continent is in an economic quagmire, a dilemma that requires multi-facet research activities. This is the motivation for this book.

Worldwide privatization has expanded rapidly but in the Middle East and North Africa (MENA) region progress has been markedly slow. The two main obstacles to privatization in the MENA region are seen to be the high level of overstaffing in public enterprises and the inability of economies to create jobs fast enough. This volume is divided into two parts. The first addresses key issues of an institutional and political economy nature to explain pressures for and against state-owned enterprise (SOE) reform and privatization. The second part of the book presents empirical studies of Egypt, Jordan, Sudan, and Turkey to illustrate the specific roles played by the state and by interest groups in the pace of SOE reform, as well as to analyze the negative impact on productivity and financial performance on an inflated public sector. The conclusions drawn from these studies are that social protection and effective labor redundancy policies should be addressed prior to privatization, and that there is a prerequisite for increased private sector investment in SOEs to accelerate MENA's integration with the world economy via trade-related programs and infrastructure.