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Comment on ‘Experience with Privatisation: A New Institutional Economics Perspective’ by Mary Shirley

Comment on ‘Experience with Privatisation: A New Institutional Economics Perspective’ by Mary... JOURNAL OF AFRICAN ECONOMIES, VOLUME 11, AERC SUPPLEMENT 1, PP. 32-36 Comment on 'Experience with Privatisation: A New Institutional Economics Perspective' by Mary Shirley Christopher Adam Oxford University 1. Introduction Mary Shirley's paper presents a compelling argument for locating the debate about enterprise performance and privatisation within a new institutional framework. Drawing on case study evidence on public water supply and telecommunications in West Africa, the paper makes two key arguments. The first is that 'countries with strong institutions privatise well'. This is uncontroversial and almost tautological: good institutions necessarily produce good outcomes if institutional quality is defined consequentially. However, the real focus of the paper is the second element of the argument, namely that, in certain circumstances, privatisation represents a feasible and desirable second-best outcome in the presence of weak institutions, specifically formal public sector institutions governing regulation and performance, which otherwise would undermine the delivery of goods and services. Though neces- sarily second best, privatisation may nonetheless be preferable to the alternative of continued public provision. This is a powerful argument with potentially far-reaching implica- tions, not least for the scope of privatisation in countries with a limited public sector capacity where prevailing wisdom has tended to http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

Comment on ‘Experience with Privatisation: A New Institutional Economics Perspective’ by Mary Shirley

Journal of African Economies , Volume 11 (suppl_1) – Feb 1, 2002

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Publisher
Oxford University Press
Copyright
© Published by Oxford University Press.
Subject
Articles
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jafeco/11.suppl_1.32
Publisher site
See Article on Publisher Site

Abstract

JOURNAL OF AFRICAN ECONOMIES, VOLUME 11, AERC SUPPLEMENT 1, PP. 32-36 Comment on 'Experience with Privatisation: A New Institutional Economics Perspective' by Mary Shirley Christopher Adam Oxford University 1. Introduction Mary Shirley's paper presents a compelling argument for locating the debate about enterprise performance and privatisation within a new institutional framework. Drawing on case study evidence on public water supply and telecommunications in West Africa, the paper makes two key arguments. The first is that 'countries with strong institutions privatise well'. This is uncontroversial and almost tautological: good institutions necessarily produce good outcomes if institutional quality is defined consequentially. However, the real focus of the paper is the second element of the argument, namely that, in certain circumstances, privatisation represents a feasible and desirable second-best outcome in the presence of weak institutions, specifically formal public sector institutions governing regulation and performance, which otherwise would undermine the delivery of goods and services. Though neces- sarily second best, privatisation may nonetheless be preferable to the alternative of continued public provision. This is a powerful argument with potentially far-reaching implica- tions, not least for the scope of privatisation in countries with a limited public sector capacity where prevailing wisdom has tended to

Journal

Journal of African EconomiesOxford University Press

Published: Feb 1, 2002

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