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The article examines economic, political, and institutional determinants of privatization using a panel of 50 countries over the period of 1988–2006. Our sample includes developed, developing, and transition economies. Privatization activity is measured by the number of privatization deals as well as the revenue raised and analyzed using the negative binomial regression and Tobit regression respectively. Although more privatization activity is usually taking place in countries displaying satisfactory economic performance in some respect, the role of economic factors turns out to be limited. The results identify a number of political and institutional determinants but some effects are specific to a particular type of economy. For example, in developing countries, right‐wing governments are associated with privatizations while new, not necessarily right‐wing governments, are behind privatization in Eastern Europe. The role of financial development is also varied, with sound financial institutions related to successful privatization in developed and developing countries but not in transition economies.
Roberts et al. (Mon,) studied this question.