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The Political Economy of Privatization in the Maghreb Region: How Domestic and External Factors Have

Published on: November 2011​
Genre: Economics/Finance|Governance/Public Sector Management|Organizational Development​ Category: Public Leadership​

This working paper examines the political economy of privatization in Algeria, Morocco and Tunisia. It uses these three countries as cases to test how political history, macroeconomic considerations and the role of International Development Agencies (IDAs) influenced the privatization process. Its theoretical framework is based on the arguments of Pollitt (1995, 2004) and Haque (2000) that these three factors significantly affect the privatization policy making and implementation. Algeria, Morocco and Tunisia have experienced similar developmental, economic and, to some extent, political paths. Internal and external political and economic factors have been pivotal in determining the result of liberalization of their economies and their outcomes. This working paper focuses on privatization as one of the main pillars of these economic reforms, and traces its evolution from the 1980s till 2007. It will answer these questions: What were the underlying political-economic factors behind the implementation of the privatization process? How instrumental and successful was it in achieving the promised economic growth, efficiency and equity?

The structure of this working paper is as follows: The first section starts with a brief overview of privatization, especially in the context of developing countries. The second section is divided into subsections. The first subsection justifies the rationale behind the selection of these three countries in particular, and how the above mentioned contextual factors led to different outcomes of the privatization program despite the socio-economic and historical similarities that have shaped these countries for many years. The second subsection analyzes in detail the contextual factors of each country separately, and the process of privatization and its outcomes. A discussion and lessons learned section then follows to demonstrate the positive or negative effects of contextual factors, and how they determined the fate of the privatization processes in each of the three countries.

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