Bank Privatization in Argentina : A Model of Political Constraints and Differential Outcomes

Clarke, George R.G. ; Cull, Robert

World Bank, Washington, DC

关键词: BANK ASSETS;    BANK DEPOSITS;    BANK FAILURE;    BANK PERFORMANCE;    BANK PRIVATIZATION;   

DOI  :  10.1596/1813-9450-2633
RP-ID  :  WPS2633

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Based on results from country casestudies, many researchers have claimed that politicalconstraints affect bank privatization transactions, which inturn affect the post-privatization performance of thebanking sector. But no study has either econometricallytested how political constraints affect bank privatizationtransactions or theretically modeled the privatizationtransaction. The authors present a simple theoreticalframework that models the inherent tradeoffs faced bygovernments and potential buyers in privatizationtransactions involving banks. The potential buyer isconcerned about the probability that the bank will remainsolvent, about the profits it will earn after privatization,and about the price paid for the assets and liabilities. Thegovernment is concerned about the price received for theassets, about layoffs, and about service coverage afterprivatization. The evidence from bank privatizationtransactions in Argentina in the 1990s supports several oftheir theoretical predictions. In particular, provinces withhigh fiscal deficits were willing to accept layoffs and toguarantee a larger part of the privatized banks'portfolio in return for a higher price. The tequila crisis(Mexico's economic crisis in 1994-95) meant thatpoliticians could protect fewer jobs and had to assume agreater share of their public banks' assets. Evidenceof better performance at banks privatized afterMexico's crisis suggests that, by tyingpoliticians' hands, the crisis may have broughtunforeseen benefits. This conjecture awaits furtherempirical validation, but the authors hope that byexplicitly incorporating the incentives politicians face,analysis can begin to address the question of why someprivatizations succeed more than others.