Privatization And Its Influence On Deficits

Course ID
Ethiopian Economics Association (EEA)
Jesiah Selvam


This paper examines the influence of privatization on deficits. Deficits, namely budget deficit, current account deficit and trade balance deficit, are the determining,but haunting issues in all economies, particularly in the Least Developed Economies (LDCs). Ethiopia is one of the LDCs that strive to control these deficits while implementing all possible measures of economic reform. Privatization as one of the measures was implemented in 1994, which resulted in privatizing about 60 percent of State Owned Enterprises (SOEs) in the country. lt is, therefore, expected that it has had direct and indirect influence on these deficit variables. The study used data over ten years, 1994/95-2003/04, and simple econometric models to test whether there is any bearing on deficit variables in connection to privatization. The empirical results show that the connectivity of privatization in relation to these variables in general is fragile and weak because of the small sized and slow paced privatization program. The study also reveals that the weak export orientation and openness were other causes which may have locked the policies like privatization in successfully managing deficits. This study, therefore, suggests that the government should ensure that the privatization programme proceed hand in hand with practical economic reforms, coupled with creating a real outward and open Economy to reduce these increasing deficits

Corporate Author: Getnet Alemu and Getachew Yoseph (Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
ISBN/ISSN: 978-9994-54-03-7
Primary Descriptors:

Budget Deficient, trade balance Deficient

Secondary Descriptor:

current account Deficient, Open Economy

Cataloge Date: 02/27/2013
Broad Subject heading: Privaitaization
Call Number: 330.963 PRO 2007
Serial Key Title: Proceedings of the Fourth International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2013-05-27 00:00:00
Forum or Discussion date: 2013-02-27 00:00:00
PDF file: Jesiah Selvam_ Privatization and its influence on Deficits.pdf
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Jesiah Selvam