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The superficial appeal of eliminating the profit component of private cost ignores hidden inefficiencies in staffing and when politics rather than whats best for people gets can drive the service strategy.
On the basis of having spent years in high places on each side of the line, it has long been eminently clear to me that the private sector is a cesspool of sleaze, waste, fraud, abuse, and inefficiency in comparison to the public sector. It's not a close call. It's a night-and-day sort of thing.
So you chose to use Mexico as your poster-child, but it turns out that you can't really rely on any of that either. Google is such a wonderful tool.
Please note that you haven't dealt with the evidence that I put forward. You just outright dismissed it* and then insinuated that I am relying on google rather than have relevant knowledge about the subject - which is an ad hominem and happens to be another entirely irrelevant angle you have approached my argument from.
Nevertheless let's sample the rest of the evidence.
Laurin and Bosic (1995) found that the Candian privatization programme led to efficiency gains for rail firms.
Ros (1999) relies on a global sample of telecommunications firms and finds that privatization led to efficiency gains**.
Boylaud and Nicoletti (2000) examine the telecommunications services in developed, OECD states, and even after controlling for increased levels of competition find efficiency gains in the sector.
Or rather than type out the outcome, you can look at Megginson, Nash, and van Randenborgh (1994) [assorted industries, majority industrialized countries] or Bourbakri and Courset (1998) [Developing countries, 32 industries] or Verbrugge, Megginson and Lee (1999) [banks, predominantly developed countries] or Boardman, Laurin and Vining (2000) [Canadian firms] or a host of others from back when this question was settled in the late-1990s. But it remains that whilst there's some dissent in the literature - and like I said, there's certain industries that aren't suited to privatization - there's broad consensus that privatization prompts efficiency gains.
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* I can only presume you are doing so for a reason that's precedes as something like this: 'But the Tequila crisis!'. Though of course I'd appreciate if you could demonstrate the systematic relevancy of privatization to Mexico's economic malfunctions rather than just directing me to the correlation - which is useless.
The paper I cited concluded that privatization led directly efficiency gains after we control for other factors, for the matter.
** It's noted that the least-developed states didn't see the same efficiency gains. That's probably because these states have weaker governments and are more prone to corruption, regulatory capture, etc. in the privatization process.
Last edited by I Notice Romance; 11-19-2016 at 08:59 AM..
On the basis of having spent years in high places on each side of the line, it has long been eminently clear to me that the private sector is a cesspool of sleaze, waste, fraud, abuse, and inefficiency in comparison to the public sector. It's not a close call. It's a night-and-day sort of thing.
Having lived in several high government places as well as a few low ones I agree its clear. The low ones win by a country mile. The cesspool in DC is a big reason .Clinton goes from dead broke to worth hundreds of millions by holding government jobs paying no where near enough to make the work.. At least we agree the answer is obvious... which proves it is not
On the basis of having spent years in high places on each side of the line, it has long been eminently clear to me that the private sector is a cesspool of sleaze, waste, fraud, abuse, and inefficiency in comparison to the public sector. It's not a close call. It's a night-and-day sort of thing.
It sure sounds like someone got a bad performance review.
Please note that you haven't dealt with the evidence that I put forward. You just outright dismissed it* and then insinuated that I am relying on google rather than have relevant knowledge about the subject - which is an ad hominem and happens to be another entirely irrelevant angle you have approached my argument from.
Nevertheless let's sample the rest of the evidence.
Laurin and Bosic (1995) found that the Candian privatization programme led to efficiency gains for rail firms.
Ros (1999) relies on a global sample of telecommunications firms and finds that privatization led to efficiency gains**.
Boylaud and Nicoletti (2000) examine the telecommunications services in developed, OECD states, and even after controlling for increased levels of competition find efficiency gains in the sector.
Or rather than type out the outcome, you can look at Megginson, Nash, and van Randenborgh (1994) [assorted industries, majority industrialized countries] or Bourbakri and Courset (1998) [Developing countries, 32 industries] or Verbrugge, Megginson and Lee (1999) [banks, predominantly developed countries] or Boardman, Laurin and Vining (2000) [Canadian firms] or a host of others from back when this question was settled in the late-1990s. But it remains that whilst there's some dissent in the literature - and like I said, there's certain industries that aren't suited to privatization - there's broad consensus that privatization prompts efficiency gains.
---
* I can only presume you are doing so for a reason that's precedes as something like this: 'But the Tequila crisis!'. Though of course I'd appreciate if you could demonstrate the systematic relevancy of privatization to Mexico's economic malfunctions rather than just directing me to the correlation - which is useless.
The paper I cited concluded that privatization led directly efficiency gains after we control for other factors, for the matter.
** It's noted that the least-developed states didn't see the same efficiency gains. That's probably because these states have weaker governments and are more prone to corruption, regulatory capture, etc. in the privatization process.
This might be more convincing if there was something in the last couple decades.
Also it would help me to know if there is some operational definition of "efficiency". Efficiency in the abstract is great, but WHO benefits from that increased efficiency? If it is a public service then the public should get the benefit of the bulk of that increased efficiency.
Please note that you haven't dealt with the evidence that I put forward.
You may call it evidence if you wish. From what I see, it is an irrelevant mish-mash culled from the off-label dustbin of history. Privatization is no magic wand. Never has been and never will be. The private sector is not some sort of beacon, but rather some sort of siren.
Having lived in several high government places as well as a few low ones I agree its clear. The low ones win by a country mile. The cesspool in DC is a big reason .Clinton goes from dead broke to worth hundreds of millions by holding government jobs paying no where near enough to make the work.. At least we agree the answer is obvious... which proves it is not
Follow the bouncing ball as dribbled by the Daily Beast. The Clintons have signed multiple multimillion-dollar book deals and have had speaking fees of $225,000 or more per appearance. All told, they have earned an estimated $230 million in this way in the years since they left the White House, all of it documented on their tax returns and financial disclosure forms.
As for the oft-slandered Clinton Foundation, it has also grown rapidly in that time, raising more than $2 billion to fight AIDS, reduce hunger and poverty, and rein in climate change. It has received millions from Middle Eastern kingdoms, mega-wealthy businessmen, and major corporations. But none of the Clintons are paid anything by the foundation.
It sure sounds like someone got a bad performance review.
Just flying at a more rarefied altitude than most. Up here you get asked and invited to come work on some interesting problems with some of the top people in the field. You can't really do all of them, but as with the menu at a top restaurant, you can pick out quite a nice multi-course meal for yourself.
You may call it evidence if you wish. From what I see, it is an irrelevant mish-mash culled from the off-label dustbin of history.
Your lack of familiarity with the public economics literature isn't an argument.
The first article I referred to was from the QJE: the foremost journal of economics - and the second journal I referred to was from the JEL: the foremost designation for literature reviews in economics. Most of the rest of it was from B journals, with a few top fields.
Nevertheless, whilst there's constant developments with regards to econometric theory, you are yet to direct me to gross deficiencies to the statistical modelling in the articles I cited. In fact the single argument you've made is that the the articles are outdated: I would appreciate if you could specify exactly where for me: I made sure to include a number of different statistical approaches, so your presumably unified critique should be interesting.
Quote:
Originally Posted by Pub-911
Privatization is no magic wand. Never has been and never will be.
I never claimed it was a magic wand. I claimed that it led to productivity gains.
Quote:
Originally Posted by Pub-911
This might be more convincing if there was something in the last couple decades.
Please see above. Unless there were some major advancements in econometric theory since the 1990s that I have missed, I have no idea why you think it is relevant that the articles I cited were all published in the late 1990s and early 2000s.
The literature of the last decade has been on how the institutional environment affects the benefits from privatization - and thus broadly focused on developing and post-Soviet transition economies - but you can still extract some stylized facts. These facts are that privatization good IFF you have a capable state (which it just so happens that developed countries do): otherwise, it's ambiguous (I highlighted this briefly in my last post). So, for example:
Gasmi, et al. (2012) find gains from privatizations in the telecommunications sector - except in Africa recource-rich landlocked states and Latin America. Gasmi et al. notes that the failings in Africa and Latin America were down to the weak institutional environment - particular with regards to contract and policy enforcement - and stagnant levels of aggregate demand.
Clarke et al. (2005) and Beck, Cull and Afeikhena (2005) find improvements in bank performance after privatization. Bourbaki (2005) finds similar. These are all in examination of developing countries.
Zhang, Parker and Kirkpatrick (2008) notes gains from privatization of electricity utilities in developing countries. Though these are swamped by the gains from competition.
Estrin (2007) finds gains in the post-Soviet transition economies in sectors where there were existing institutions could handle it. Notes that the incumbency effect was negative: ownership by foreign-nationals was a positive in and of itself. Estrin (2009) examines the Central European satellite states and former regions of the Soviet Union independently and finds that a large Soviet-legacy affect seems to inhibit the gains made from privatization in the former regions of the Soviet Union (but not Central Europe) - but this is negated by ownership by a foreign-national.
In otherwords, the literature, in the modern times, still shines on Privatization, but includes some health warnings for developing countries with weak states and no legacy of private-ownership.
Both of these warnings happen to be irrelevent, though.
Quote:
Originally Posted by Pub-911
Also it would help me to know if there is some operational definition of "efficiency".
In the economics literature it is typically defined as the profit per unit of labor or capital.
Quote:
Originally Posted by Pub-911
Efficiency in the abstract is great, but WHO benefits from that increased efficiency?
The argument I have made thus far is that privatization is good for the economy in pure economics terms, GDP.
The distributional consequences depend on the sector. For utilities it seems that in both the short- and the long-run there's net gains across all sectors. It's less clear with industries such as the financial sector in the short-run but across the long-run there is an advancement of the social interest, I would claim, as capital and labor are allocated more efficiently, across the economy, and people engage in economic activity at a rate tending more towards their maximum potential.
In general I prefer to regulate business as to make the pie bigger and then have the government compensate the losers with cash transfers. That inhibits the worst of the rent-seeking: which is one of the worst consequences of any government intervention in the first place - it fosters a culture of rent-seeking ahead of genuine productivity growth.
Every time I have to visit the DMV I wind up wishing it was Privatized. For the sake of Customer Service if nothing else. I mean; it's not like it could be worse.
The DMV; however is a high priority for the DOR (dept of REVENUE) so it's pretty unlikely that they would hand that over.
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