The role of governance in privatisation reforms: A European analysis

Abstract

This study analyses the role of regulatory and institutional context, denoted as governance, on privatisation reforms. Governance is represented by the Worldwide Governance Indicators and privatisation data are provided by the Privatization Barometer project. We found empirical evidence on a sample of 22 European countries over the period 2002-2013, through estimating several econometric equations that control endogeneity. Our findings suggest that privatisation is shaped by the quality of regulation and institutions. More specifically, privatisation reforms in modern Europe tend to be more relevant when governance quality is reduced, while results suggest the contrary effect in the case of transitional economies.