The International Monetary Fund and the Global Spread of Privatization

Abstract

The sale of state-owned assets – privatization – has been a defining characteristic of the global economy in the last two decades of the twentieth century. More than 8,000 acts of privatization were completed around the world between 1985 and 1999 (Brune 2003).2 These sales were valued at more than $1.1 trillion (in constant 1985 US dollars). After an initial large spike in 1987 (when almost US$120 billion in state-owned assets were sold in only 77 transactions, mostly by Organization for Economic Cooperation and Development (OECD) countries), privatization swept the globe in the 1990s (see Figure 4.1). From an average of roughly US$50 billion per year (on 500-1,000 transactions) in the early 1990s, revenues from global privatizations grew to US$87 billion on more than 1,700 transactions by 1995, peaking in 1998 at US$171 billion of assets sold in 2,500 transactions. Although almost two-thirds of the privatization activity in terms of revenues took place in high-income countries, the bulk of privatization transactions occurred in low-and middle-income countries (see Table 4.1).

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