Is privatisation without effective regulation bad for the poorest?

Abstract

There is an urgent need of more efficient and effective infrastructure/utility provision, a boost in investment levels from both domestic and foreign sources and an expanded and dynamic private sector in African countries. All of the above can be achieved through privatisation. However, African states have been slow and reluctant privatisers as a result a significant proportion of industrial/manufacturing and most infrastructures still belong to the state Nellis (2005). However, Leftist thinkers have condemned the privatisation of former state-owned services as a sell-out of public goods and as a final victory of market capitalism that has a tendency to make the rich even richer and more affluent and the poor more destitute. As most developing nations are focused on reducing poverty for some privatisation may be the way out. The paper explores how privatisation may reduce or increase poverty levels. The focus of this paper is on African countries. The results of privatisation in Africa are mixed and it is observed that privatisation has not been entirely successful for any of the African countries.^[1] This paper attempts to analyse whether privatisation without effective regulation is bad for the poorest in society and illustrates the case of privatisation in Guinea and Senegal.

Keywords: Privatisation, Africa, Poverty Reduction, Regulation

[1] http://www.ascleiden.nl/content/webdossiers/privatization-africa