The Privatization of Nicaragua's Energy Sector: Market Imperfections and Popular Discontent

The Privatization of Nicaragua's Energy Sector: Market Imperfections and Popular Discontent

Neoliberal economic policy makers place a strong emphasis on the privatization of state‐run enterprises. The private sector, advocates argue, is much more efficacious at developing and distributing vital resources. However, do all Third World countries reap the benefits of privatization? Using the p...

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Bibliographic Details
Published in:Latin American policy 2010-06, Vol.1 (1), p.114-132
Main Author: Ripley, Charles G.
Format: Article
Language:eng
Subjects:
disadvantages
energy
institutions
Nicaragua
privatization
solutions
surveys
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Summary:Neoliberal economic policy makers place a strong emphasis on the privatization of state‐run enterprises. The private sector, advocates argue, is much more efficacious at developing and distributing vital resources. However, do all Third World countries reap the benefits of privatization? Using the privatization of Nicaragua's public energy companies (2000–2008) as a case study, I have found that, without adequate conditions, including the proper institutional framework, transparency, enforceable laws, and policies that compensate for market failures, privatization has not only failed to deliver benefits, but according to my survey data, has also caused dissatisfaction with the population. I conclude by advancing policy suggestions. Los creadores de la política económica neoliberal enfatizan con fuerza la privatización de empresas dirigidas por el estado. Ellos argumentan que el sector privado es mucho más eficaz para desarrollar y distribuir recursos vitales. Sin embargo, ¿se benefician todos los países tercermundistas de la privatización? Al analizar la privatización de las empresas públicas de energía en Nicaragua (2000–2008) como estudio de caso, he descubierto que, sin las condiciones adecuadas, entre éstas un marco institucional apropiado, transparencia, leyes que se apliquen, y políticas que compensen las fallas del mercado, la privatización no solamente ha fallado en sus beneficios, sino, según mis datos de encuestas, también ha provocado la insatisfacción en la población. Concluyo al proponer sugerencias de política.
ISSN:2041-7365
2041-7373