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Huang, "Privatizing public enterprises in developing countries: The case of Taiwan's government-owned banks," 1993

USC Dissertation in Economics.
August 26, 2009

Tien-Mu Thomas Huang, D.P.A.

Abstract (Summary)
Public enterprise privatization has become a major policy issue in both developed and developing countries. However, the shift from government-run economies to private enterprise in the developing world has been much less smooth than expected. Implementing this radical policy change has been proved to be slow, frustrating, and perplexing. It is not clear that the theories and empirical evidence purported to justify privatization in developed countries are applicable to the developing world.

By using the case study method, this dissertation is devoted to both descriptive and causal analyses of Taiwan's government-owned banks privatization policy. The primary purpose of this study is to identify factors affecting the implementation effectiveness of Taiwan's policy to privatize its government-owned banks between 1989 and 1992.

To attain this purpose, an indigenous implementation model is developed by synthesizing implementation literature and conceptualizing the privatization experiences of fifteen developing countries. The author identified six variables: ideological compatibility, sociocultural characteristics, institutional maturity, strength of leadership, administrative capability, and political situation, that influence the successful implementation of a privatization policy. Application of this indigenous conceptual framework shows that most implementation problems stem from a misfit between privatization content and developmental context.

By applying this indigenous conceptual framework in the case study, the author finds that ideological and sociocultural factors are basically supportive and stable in the privatization process, nevertheless, institutional, leadership, administrative, and political variables have become major problems that hamper implementation of Taiwan's policy to privatize its government-owned banks. Taiwan's residual authoritarianism is the single most formidable problem encountered in the implementation process. Once again it is evident that the politics-administration dichotomy is impracticable. (Copies available exclusively from Micrographics Department, Doheny Library, USC, Los Angeles, CA 90089-0182.)

Advisor: Clayton, Ross