The relationship between public debt and privatisation: the moderating roles of political ideology and electoral cycles

The relationship between public debt and privatisation: the moderating roles of political ideology and electoral cycles

Blog Article

Using a sample of 25 European countries between 1995 and 2013, this study shows a bidirectional relationship 3282779348850 between privatisations and public debt.Firstly, our findings suggest that governments with higher levels of debt tend to privatise state-owned enterprises (SOEs) to a greater extent than less-indebted governments.Subsequently, the results show that privatisations effectively reduce indebtedness.This means that causality between privatisation and public debt should be considered in future studies.In addition, we have found that such a strategy is used more by right-wing governments, which implies the existence case of whispering angel of partisan effects.

However, our findings do not support any effect caused by electoral cycles.