World Bank and privatization
The Wall Street Journal carried a column by Michael Phillips yesterday (7-21, "The World Bank as Privatization Agnostic," page 2) reporting on changing attitudes toward privatization at the World Bank.
The Bank has promoted privatization of public utilities such as telephone, electric, and water systems, as a development tool. However, unexpected economic results and political opposition in client countries are causing people at the Bank to rethink.
My impression from the article is that electricity and water especially are often so highly subsidized as government operations, that privatization leads to large price increases. These are costly to consumers, impose a big burden on the poor, and create widespread opposition to the privatization. The political problems make investors leery of putting money into the private operations.
But make up you own mind abot what it says. Brad DeLong quotes extensively from the column here: "The World Bank Starts Rethinking Utility Privatization".
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