Privatization in Latin America: New Roles for the Public and Private Sectors

By Werner Baer; Melissa H. Birch | Go to book overview

9
Privatization in Spain

Rick L. Chaney and Alan Dye

Spain's entry into the European Economic Community (EEC) has led to the adoption in Spain of a general policy of deregulation for both public and private firms to stimulate competition in Spanish markets. In the public sector, privatizations have been a response to this deregulatory policy. We will show, however, that the Spanish privatization experience has been more pragmatic than programmed. It has taken place on a case-by-case basis and has focused on those publicly owned firms that were in serious financial difficulties or without strategic interest. We will also show that as a by-product of its entry into the competitive EEC, Spain's larger, higher cost state-owned firms have begun to carve out market niches elsewhere--primarily in Iberoamerica.

The trends in privatization of state enterprises in Spain are reflected in the share of the public enterprise sector in the GDP. Table 9.1 shows that the recent decline in the share of GDP on a value-added basis of the public enterprise sector began in 1986. Prior to that time, from 1980 to 1985, participation of the public enterprise sector in the GDP tended to increase, although compared with the rest of Europe, Spain's share was still relatively low compared with the EEC mean of 14.1 percent ( De la Dehesa, 1992b, p. 58). The increase during this period reflects both economic and social considerations that the Socialist government faced after winning the 1982 elections. The reduction in this share reflects a deliberate change in public enterprise sector policy undertaken after the recessionary period ended in 1985, as well as the reprivatization of firms that had been nationalized because they were on the verge of collapse. However, it does not necessarily reflect a decline in the perceived importance of the state intervention by policymakers especially in the national industrial and service sectors. In principle, the policy of privatization of state enterprises is part of a larger program of deregulation and liberalization of the Spanish economy as it converges toward European standards. Besides the

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Privatization in Latin America: New Roles for the Public and Private Sectors
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Figures and Tables vii
  • Preface xi
  • Notes xiii
  • 1 - Privatization and the Changing Role Of The State in Brazil 1
  • References 18
  • 2 - Privatization and the Role of the State In Post-Isi Mexico 21
  • Notes 41
  • 3 - The Regulation of Newly Privatized Firms: an Illustration from Argentina 45
  • References 68
  • 4 - Privatization: the Role of Domestic Business Elites 71
  • Notes 91
  • 5 - Foreign Direct Investment in Latin America During the 1990s 95
  • Conclusion 112
  • Notes 113
  • References 114
  • 6 - The Financial Sector in Latin American Restructuring 117
  • Notes 131
  • Notes 132
  • 7 - Privatization with Share Diffusion: Popular Capitalism in Chile, 1985-1988 135
  • Conclusion 153
  • Appendix 155
  • Acknowledgements 158
  • Notes 159
  • Refferences 160
  • 8 - Liquid Equity Markets as an Engine For Long-Term Growth in Latin America 163
  • Notes 177
  • Notes 180
  • 9 - Privatization in Spain 183
  • References 200
  • Selected Bibliography 201
  • Index 207
  • About the Contributors 213
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