Being Classically Liberal

Is capitalism superior to socialism? The evidence says yes. According to research from the World Bank…

“Privatization is one of the major economic phenomena in recent economic history. This paper summarizes empirical research on the effect of privatization on the performance of privatized firms and on the society. The extant evidence from privatizations in many developed and developing shows that privatization usually results in an increased productivity and positive effects on the society. The effect of privatization depends however on economic institutions in place, in particular on rule-of-law, competition, hard budget constraints, quality of governance and regulation…

This research provides solid evidence that privatization “generally” works, both for the firms that are privatized and for privatizing economies as a whole. While privatization usually results both in increased productivity and reduced employment in privatized firms, fears of negative overall effects at the economy level are not justified. An important caveat here is that the benefits of privatizations depend on market institutions being in place. The countries that manage to ensure property rights protection and the rule-of law, impose hard budget constraints, increase competition, and improve corporate governance reap the largest benefits. If appropriate institutions are not in place, privatization often fails to improve performance at the firm level and for the economy as a whole.”

Privatization: What Have We Learned?
Impuestos vs crecimiento económico y empleo

Esta es una recopilación de varios estudios enlazados en esta entrada de Being Classically Liberal. Tomé las partes más relevantes de los abstracts o de los documentos en general sobre el tema.

“The most recent studies find a significant negative correlation: An increase in government size by 10 percentage points is associated with a 0.5 to 1 percent lower annual growth rate (…) we discuss two…

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