Politics, Public Opinion, and Privatization in France: Assessing the Calculus of Consent for Market Reforms
Durant, Robert F., Legge, Jerome S., Jr., Public Administration Review
With perceptions of government overload, fiscal stress, and maladministration pandemic worldwide, proponents of administrative reform have embraced the privatization of state-owned enterprises (SOEs) as a major component of the New Public Management (Peters 1996). These efforts are viewed by proponents as among the best ways to diminish the inefficiencies and bureaupathologies they associate with public ownership of key industries (Ingraham 1997), especially when these industries must compete within the global economy (for instance, the telecommunication, airline, and oil and gas industries). These pathologies include monopoly, hierarchy, permanence of structure, and constraints on administrative action (Zahariadis 1995; Bernier, Bedard, and Petit 1996; Peters 1996; Durant, Legge, and Moussios 1998).
Importantly, the movement toward denationalization of SOEs is not the exclusive domain of conservatives bent on cutting the size of the public sector or unfettering multinational corporations. Even political parties associated in the past with nationalizing industry (such as the Socialists in France, the "old" Labour Party in Great Britain, and the Partido Revolucionario Institucional in Mexico) are increasingly forced to embrace government "load shedding" in some form (Perotti 1995; Benz and Goetz 1996; Gabel 1998; Kaufman and Zuckermann 1998). All do so in response to the globalization of markets, the terms of political or economic integration of regions (cutting deficits to acceptable levels for entrance into the European Union under the Maastricht Treaty, and becoming competitive under the North American Free Trade Agreement in the Western Hemisphere), and pressures from international lending institutions to invigorate their economies (such as the World Bank and the International Monetary Fund).
While the allure of privatization can be substantial, so too are the anxieties that the denationalization of SOEs can occasion. Formerly symbols of national pride and grandeur, privatizing SOEs can evoke nostalgia among citizens for bygone eras. Moreover, the threats and realities of lost jobs through downsizing and relocation can be chilling to many citizens. In these instances, the burdens and benefits of privatization often are perceived as falling disproportionately on different segments of society. At the same time, former SOEs can fall under the control of nationals unsympathetic to the aims of the government in power. Even worse as a blow to national pride, former SOEs and private firms may fall under the influence of foreign nationals, capitals, or money markets when sold or exposed to international market forces of globalization.
Nor has it yet been demonstrated compellingly that such risks are worth taking. Some researchers find little difference between the performance of public and private enterprises operating in the same economic sector (Eckel and Vining 1982, 1985; Borins and Boothman 1985). Others find the gains in profitability that devotees of privatization expect (Boardman and Vining 1991; Bhattacharyya, Parker, and Raffiee 1994; Martin and Parker 1995), but others attribute similar gains less to ownership or market exposure than to overall economic performance (Dunsire, Hartley, and Parker 1991). Still other scholars assign greater importance to the level of competition involved (public or private), the stringency of environmental regulations encountered, and differences in managerial quality and entrepreneurship (Borins and Boothman 1985; Vickers and Yarrow 1988; Roberts 1992). Finally, other work indicates that nonmarket values (such as service quality) can suffer appreciably before true competition arises and while price controls are put in place. This tends to occur unless performance measures on these dimensions are reported publicly (Durant, Legge, and Moussios 1998).
In light of these findings, how do citizens feel about privatizing SOEs in their countries, how do they arrive at these judgments, and do these opinions vary among different segments of the public? …