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DOES PRIVATIZATION FOSTER CHANGES IN THE QUALITY OF LEGAL INSTITUTIONS?
Author(s) -
Boubakri Narjess,
Cosset JeanClaude,
Smaoui Houcem
Publication year - 2009
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.2009.01247.x
Subject(s) - language change , enforcement , corporate governance , business , quality (philosophy) , order (exchange) , law enforcement , scale (ratio) , market economy , finance , economics , law , political science , art , philosophy , physics , literature , epistemology , quantum mechanics
We analyze the effect of privatization on the quality of legal institutions of governance. Our findings suggest that large‐scale privatization (in terms of progress and volume) increases the risk of corruption in developing countries but has no effect on the legal institutions of governance (i.e., law and order and investor protection). The method of privatization (public share issues versus private sales) helps curb corruption and improve the quality of law enforcement and of investor protection. In developed countries, the progress and volume of privatization reduce the risk of corruption, and the method of privatization enhances the quality of law enforcement.