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Privatization, Yardstick Competition and Employment Dynamics: Evidence from Bangladesh

Author

Listed:
  • Bhaskar, V.

    (University of Essex)

  • Bishnupriya Gupta

    (University of Warwick)

  • Mushtaq Khan

    (School of Oriental and African Studies, London)

Abstract
We analyze the dynamics of public and private sector employment, using the natural experiment provided by the partial privatization of the Bangladeshi jute industry. A differences-in-differences approach allows us to infer ownership effects. Although the public sector had substantial excess employment of workers initially, this excess was substantially eroded by the end of the period we study. This finding is consistent with the idea that the central authorities, which were increasingly financially constrained, used yardstick competition to reduce public sector managerial rents. The extent of such erosion differs between white-collar and manual worker categories, with excess employment persisting only in the former.

Suggested Citation

  • Bhaskar, V. & Bishnupriya Gupta & Mushtaq Khan, 2002. "Privatization, Yardstick Competition and Employment Dynamics: Evidence from Bangladesh," Royal Economic Society Annual Conference 2002 26, Royal Economic Society.
    • Handle: RePEc:ecj:ac2002:26
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    Cited by:

    1. David McKenzie & Dilip Mookherjee, 2003. "The Distributive Impact of Privatization in Latin America: Evidence from Four Countries," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 161-234, January.
    2. Bonev, Petyo & Glachant, Matthieu & Söderberg, Magnus, 2022. "Implicit yardstick competition between heating monopolies in urban areas: Theory and evidence from Sweden," Energy Economics, Elsevier, vol. 109(C).
    3. M. Islam & Ali Farazmand, 2008. "Perceptions of Civil Servants Toward Privatization and Development: A New Exploratory Study," Public Organization Review, Springer, vol. 8(1), pages 37-52, March.

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