Empirical Evidence on Satisfaction with Privatization in Latin America

Since the 1980s, privatization of formerly state-owned firms has been extensively implemented by governments across Latin America. Despite the fact that most evalu-ations of the process fail to find significant adverse efficiency and welfare effects, there has been a strong surge in public discontent with such policy in the region. This paper performs a systematic empirical analysis of the determinants of such dissatisfaction, using survey data from Latinobarometro covering 17 countries over the period 1998-2008, complemented by country level data on macroeconomic, political, and insti-tutional aspects as well as data on privatization. Dissatisfaction appears to respond to absolute and relative welfare effects, and we find a robust U-shaped effect in term of education and income levels, with individuals in the middle of such distributions being more critical with the outcome of privatizations. JEL Classification: L33, D83 Since the 1980s, privatization of formerly state-owned firms has been exten-sively implemented by governments across Latin America, with infrastructure sectors (water, transport, energy and telecommunications) generating most o