Is Infrastructure Privatisation Inappropriate for Developing Countries

News 2011

​Is Infrastructure Privatisation Inappropriate for Developing Countries?

February 28, 2011

​In his recent article, “Infrastructure Privatisation: Oversold, Misunderstood and Inappropriate” (abstract), published in the January 2011 edition of the Development Policy Review, AKU-ISMC Assistant Professor Dr Jeff Tan explores the role and possible failures of infrastructure privatisation in developing countries.

Dr Tan’s research focuses on the interaction of politics and economics on regional development, with a particular interest in the impact of privatisation. His recent article reviews the impact of infrastructure privatisation in developing economies, which has failed to improve efficiency or finance investment. Instead, Dr Tan argues, it has led to increased public financing and risk sharing and has failed to incentivise private investment. The response to this failure has been to focus on increased regulation. He further argues that in the context of developing economies, such regulation is inappropriate and constrained by lack of available technical and informational resources. Thus, infrastructure privatisation is, according to Dr Tan, inappropriate for developing countries.
This article builds on Dr Tan’s earlier work, including his book on Privatization in Malaysia (Routledge, 2008) and a chapter “The Political Economy of Privatisation in Malaysia” in Leading Issues in Competition, Regulation and Development (Edward Elgar Publishing, 2004). His current research is on entrepreneurship and innovation, and financial liberalisation and capital accumulation.

Razia Velji
Coordinator, Planning & Academic Development
Institute for the Study of Muslim Civilisations