3
approaches, all concur on the maxim that privatizations are processes that are political by
definition. Dinavo (1995), for example, who is a strong believer in the positive impact of
privatizations on economic and political development maintains: “politics plays the most
important role in deciding whether or not to privatize” (1). Farazmand (2000), who in
diametrical opposition to Dinavo (1995), is convinced of the pernicious effects of
privatizations on as many grounds as equality, labor, accountability, transparency and
environment, also affirms that privatizations are political agendas of corporate elites who
have, as their main goal, of taking over the entire realm of public spheres in the world
(11). Suleiman and Waterbury (1995), with a more pragmatic assessment of the pros and
cons of privatizations, concur as well that privatizations are always driven by explicitly
political rationale and are rarely justified on economic grounds alone (3).
Political scientists and sociologists, who only recently started studying
privatizations, also confirm that they are essentially political processes and offer
numerous explanatory variables for them being so. Birch and Haar (2000), for example,
associate privatizations with the entire neoliberal economic reform (3) and directs our
attention to the variables of political credibility, external pressure and ideological
commitment entailed by privatizations in Latin America (4). Murillo (2002) explores the
particularities enveloping different privatization programs in Latin America and argues
that the beliefs of political actors and patterns of coalition building influence the selection
of regulations as well as the conditions of sales in privatizations.
1
Etchemendy’s (2001)
argument that patronage networks determine the fate of privatization transactions
1
Accordingly, if economic nationalism is high, the privatization of public utilities is more likely to include
restrictions on foreign ownership and management. Since privatization of public utilities involves selling
some of the largest assets that can be distributed, governments define the conditions of sales so as to
consolidate coalitions. Ergo, the beneficiaries of privatizations have included groups belonging to the core
constituencies of the privatizing governments.
Convention