Brown Bag Seminar by Ali Baydarol (Sabancı University)

"Crisis-Stimulated Change: Rapid Privatization During Times of Dual Crisis in Turkey and Slovenia” 

Although rapid privatization was prevalent across the developing world throughout the late 1980s and 1990s, strong resistance halted privatization for extended periods in some cases. Nevertheless, even in instances where privatization reforms were stalled for a long time, privatization was suddenly accelerated, most notably in Turkey and Slovenia. What explains this puzzle? By examining the most different cases of Turkey and Slovenia, the current paper posits that dual crises, defined as a public debt crisis deepened by a banking crisis, compelled privatization-skeptic ruling parties and other veto players to finally endorse privatization. This supports the view that economic crises mitigate the negative effect of veto players on reforms and further suggests that their preferences may not be as fixed as traditionally assumed. Finally, the paper proposes that not any kind of economic crisis, but dual crises are more likely to accelerate privatization.