At this juncture, it is natural to draw some conclusions from our work. Instead of summarizing the main results obtained, we will present our reflections on what we consider the two most important findings of the book.
The first is a stylized fact at the macroeconomic level. Privatization is one of the main events of the economic and financial history of the twentieth century. However, at the turn of the century, the process abruptly slowed down, and actually appears a spent force both in developed and in less developed economies.
The second is a finding at the microeconomic level. Privatization has been partial and incomplete. In developed economies, it mostly involved the floating of the company shares in the stock market. In less developed countries, it took the form of strategic partnership with foreign operators. However, in most cases privatization did not entail a dramatic change in governance structures, as private ownership and public control seem to coexist.
These findings beg two fundamental questions, which this book tries to address. The first is the following. Is privatization a long-term trend proceeding in parallel with the advance of market capitalism, or rather a cycle following the short- or medium-term fluctuations of economic fundamentals?
The economic model of privatization that we developed in this book suggests that privatization processes are shaped by economic and political determinants. Particularly, they are affected by economic outlook and market conditions, so that large privatization waves are systematically associated with economic growth and bull stock markets. But political preferences and budget constraints also matter. Indeed market oriented governments in financial distress appear more eager to privatize.
The actual stalemate and the above considerations suggest that the big privatization wave of the 1980s and especially the 1990s has mostly been a cyclical phenomenon, where the engines of sales have been economic growth, booming stock markets, and worsening fiscal conditions. The same model described above forecasts that a new large-scale privatization cycle could start as soon as the economy recovers from the actual depression. Indeed, governments have property left to sell.
The second question is related to the last observation. Is partial privatization a snapshot of a process in motion, or rather a stable outcome? In other words,