 Fuelling political fiscal cycles by opportunistic privatization in transition economies: The case of AlbaniaEndrit Lami, Drini Imami and Holger Kächelein Economic Systems, 2016, vol. 40, issue 2, 220-231 Abstract: This paper provides insight into the widely studied phenomenon of political business cycles by analyzing the impact of elections on the privatization of public assets in transition economies. The hypothesis of this article is that incumbents opportunistically schedule privatizations to take place close to the next elections in order to finance higher public expenditures, aiming to please voters and increase the chances of being re-elected, particularly when their ability to borrow is constrained by high public debt. We consider the case of Albania, which is a transition and small open economy with a relatively high public debt. We find significant increases of income from privatization before elections. Despite often being trumpeted in the context of structural reforms, the intentional privatization of public assets in times of election is most likely a sub-optimal choice for the public interest. Studying the impact of elections on the privatization of public assets could be of interest to other transition economies facing fiscal constraints. Keywords: Privatization; Political business cycles; Elections; Albania (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:40:y:2016:i:2:p:220-231 DOI: 10.1016/j.ecosys.2015.10.001 Access Statistics for this article Economic Systems is currently edited by R. Frensch More articles in Economic Systems from Elsevier Contact information at EDIRC. |
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