The political economy of privatization in Sub-Saharan Africa

Objective. Few studies have examined the determinants of privatization in Sub-Saharan Africa. This study examined the macroeconomic, political, and institutional factors that drive the privatization process in Sub-Saharan Africa. Methods. We used pooled ordinary least squares regression estimation technique to analyze the determinants of privatization in 22 Sub-Saharan African countries over a period of 12 years (1991-2002). Results. We found that inflation, income inequality, and the institutional or governance infrastructure are key determinants of privatization in Sub-Saharan Africa. On the other hand, we did not find democracy and debt to be significantly correlated with privatization. However, countries with high debt levels that were also experiencing high inflation were more likely to privatize. Conclusions. Government leadership and, consequently, politics play a significant role in the privatization decision in Sub-Saharan African countries.