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European Integration, Market Liberalisation and Privatisation

  • Judith Clifton
  • Francisco Comín
  • Daniel Díaz Fuentes
Chapter

Abstract

At the end of the 1970s, the prospect of privatising the public enterprises which operated in sectors such as water, telecommunications, railways or air transportation seemed a thoroughly unappealing one in political terms. Not even the future privatisation ‘champion’, the British Conservative Party, envisaged this kind of reform when it came to power in 1979. Only two decades later, however, privatisation had become a global fashion. Certain industrial and service sectors were more deeply affected than others. Telecommunications had been totally or partially privatised in nearly all countries, as had selected companies operating in the airline industry, electricity generator and distributor firms. Privatisation had also affected public utilities such as gas and water, as well as other important parts of the public sector including hospitals and prisons. Privatisation had penetrated deeply into some economies to the extent that, much to the chagrin of privatisation promoters, in some regions, such as the EU, it was claimed there were few organisations left to privatise.1 As we have mentioned, Yarrow has pointed out the inadequacy of the dominant explanations for privatisation. Given the importance of the privatisation process to the economy, citizens and governments, this is a serious problem. Based on empirical analysis of the process of privatisation across the EU, some of the dominant explanations of privatisation are examined, including the ‘British paradigm’ and the ‘multiple logics’ approach, and it is enquired to what extent the process of EU integration and market liberalisation can be used as explanatory factors for this experience.

Keywords

Privatisation Proceeds Public Enterprise Central European Country Market Liberalisation Privatisation Process 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. 1.
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    In the first place, the exchange rate poses problems due to the fluctuations of each currency with respect to the dollar, which do not comply exclusively with real factors of the economies under consideration. In the second place, to define a deflator, as indices of industrial prices or consumption of the United States, would not provide an accurate estimation of these real values of privatisation of the European economies, due to deviations in the evolution of real exchange rates. In the third place, most privatisation proceeds were related to the trend of the share prices, which were quite volatile. Thus it is difficult to define current values. At the same time, studies about the British privatisation programme point to an under-evaluation of the IPOs which generally were avoided in the EU countries in the 1990s (Bishop, Kay and Meyer 1994, 1995). Finally, the value of privatisation through POS depended on the grade of capitalisation which differed significantly among countries and which varied as a result of privatisation itself. Capitalisation of the stock market with respect to the GDP was 87% in 1990 in the UK, 26% in France and 14% in Italy, whilst in 1997 it was 151%, 39% and 23% respectively.Google Scholar
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    World Bank (1999).Google Scholar
  44. 44.
    These results for smaller economies confirm the evidence presented by OECD (2001:48) for EU candidates such as Hungary, Poland and Czech Republic, or for other OECD economies such as Australia and New Zealand.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2003

Authors and Affiliations

  • Judith Clifton
    • 1
    • 2
  • Francisco Comín
    • 3
  • Daniel Díaz Fuentes
    • 4
  1. 1.Universidad de OviedoSpain
  2. 2.Open University and University of LeedsUK
  3. 3.Universidad de Alcalá de HenaresSpain
  4. 4.Universidad de CantabriaSpain

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