Political and institutional environment and privatization prices

We study the link between the political and institutional context and privatization sales prices. The latter serves as a measure for assessing the extent to which privatization goals have been met. Whereas this link has been studied theoretically, there are very few, if any, empirical papers on this relationship. We use data from 308 privatizations around the world and apply a cross-country approach, including instrumental variables. We find that while the overall political regime does not matter much for prices, the political processes beyond the basic regime do matter. Institutional context also produces a significant impact on prices. Both results are robust to changes in specification.