Centre for Studies in Democratisation
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Students' Working Paper Series
Politics, Performance and the People:
Assessing Factors Shaping Public Opinion of
Privatization in Mexico
Matthias Baumgarten
MA student of International Political Economy at the
University of Warwick
Matthias.Baumgarten @gmx.de
Working Paper n. 7/ 2011
Centre for Studies in Democratisation
Department of Politics and International Studies
University of Warwick
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United Kingdom
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Abstract
Privatization of formerly state-owned industries became a common policy
instrument in the 1970s. However, most scholarly studies are still limited to
the economic aspects of this phenomenon, looking mainly at welfare and
efficiency effects. This omits the crucial importance of political aspects,
especially public opinion, for privatization outcomes. The following paper
focuses specifically on factors influencing public opinion of privatization,
choosing Mexico as the object of study due to its interesting internal and
external political dynamics. Developing a framework based on Durant and
Legge’s French model (2002), six groups of influence factors are analyzed
using data from the ‘Latinobarómetro 2007’. The comparison of
theoretically derived relationships with the statistical results of univariate,
bivariate and multivariate analyses supports most research hypotheses, yet
it also highlights a number of interesting deviations in terms of significance,
direction and strength. Furthermore, clear national differences between the
Mexican and the French results are apparent. The findings offer valuable
insights into factors shaping public opinion of privatization, and underline
that this topic area clearly deserves further research in the future.
Keywords: Privatization, Public Opinion, Mexico, State Performance,
Government Services
Politics, Performance and the People:
Assessing Factors Shaping Public Opinion of Privatization in
Mexico
Matthias Baumgarten
INTRODUCTION
The beginning post-war era, which was characterized by a lack of private
sector investment (Parker and Saal 2003), led governments around the world
to set up state-owned enterprises (SOEs) for the provision of infrastructure
and public goods (Toninelli 2000). Yet SOEs were not merely commercial
entities, but also pursued political goals like employment and social
inclusion (Chang 2006). In developing countries like Mexico, imports were
restricted to meet local demand through nationalized domestic industries
(Frieden 2007). This import substituting industrialization (ISI) formed an
integral part of ongoing nation building processes and economic
development (Noll 2000). However, the end of the post-war ‘Bretton Woods
era’ in the 1970s created a decisive shift to neoliberal policies (Williamson
1993), and state involvement in the economy began to be viewed
increasingly as a burden (Eichengreen 1998). Consequentially, the
privatization of SOEs became a standard policy instrument and still is today.
The majority of studies about privatization are limited to its economic
aspects, emphasizing welfare-enhancing effects by overcoming the
inefficiencies inherent in SOEs. However, they fail to acknowledge the
equally important political aspects for the understanding of privatization
outcomes, and especially the importance of public opinion. This paper
1
therefore analyzes factors that influence public opinion of privatization.
Mexico is chosen as the object of study, as its citizens have long and
ongoing experience with privatization programmes, while at the same time
enjoying increasing political rights to voice their opinions. Furthermore,
Mexico and Latin America as a whole up to now received only scarce
scholarly interest in the area of privatization.
To obtain a solid choice of influence factors, I base the framework
developed for this paper on Durant and Legge’s (2002) work, which
analyzed privatization in France. Each influence factor is described through
central theoretical assumptions and operationalized using data from the
‘Latinobarómetro’ survey. The year 2007 is taken as reference, in order to
avoid distortions created by the subsequent period of financial crisis. After
looking at each variable’s univariate statistics, the theoretical relationships
are subjected to empirical analyses using bivariate and multivariate
techniques. The results support most of the theoretical predictions, but also
show remarkable deviations from expected significance, direction and
strength. Also, a comparison with Durant and Legge’s French findings
highlights clear national differences. The most striking findings are the
distinct support for Inglehart’s post-materialist theory (1990) and the rather
weak connection between the government’s reputation and the judgement of
its policy programmes. The paper thus creates a political perspective of
privatization in Mexico, and raises interesting questions for future research.
Privatization, politics and the Mexican context
A wave of developing world debt crises, starting in Mexico in 1982 (Haber
2
et al. 2008), convinced the International Monetary Fund (IMF) and the
World Bank to adopt the neoliberal ‘Baker Plan’. This plan made further
loans to developing countries conditional upon long-term structural change
towards an open-market system (Chang 2006, Bratton et al. 2004).
Privatization of SOEs was one of the central means to raise productivity and
generate revenues to service foreign debt (Ramírez 2003). This neoliberal
focus on market dynamics led most researchers to concentrate exclusively
on the economic aspects of privatization.
Economics of privatization
For economists, state production is a method to overcome market failures,
e.g. by providing public goods (Shirley 1997). The state must ensure fair
pricing and adequate supply to deliver welfare gains. Conversely,
privatization is “any material transaction by which the state’s ultimate
ownership of corporate entities is reduced” (OECD 2009:7). It is generally
presented as response to the inefficiencies of SOEs (Megginson and Netter
2003). These inefficiencies include principal-agent problems, i.e. conflicts of
interest between SOE managers and the overseeing political bodies
(Robinson 2003). Furthermore, political motives like patronage, corruption
and employment creation may overrule profit considerations (Chang 2006).
The lack of competition additionally leads to decreased innovation, reduced
product quality and finally to a lower general welfare (Shleifer and Vishny
1994).
Accordingly, inefficient SOEs can become an obstacle to growth,
especially in developing countries, and need to be privatized in order to
3
regain efficiency (Shirley 1997). Successful privatization is based on the
assumption that sales and tax revenues as well as reduced prices of goods
outweigh
potential
welfare
losses,
e.g.
increased
unemployment
(Ramanadham 2002, Ramírez 2003). However, despite the abundance of
economic models there is no clear empirical evidence that efficiency benefits
are generally realized (Durant and Legge 2002). The singular focus on
economic aspects, as the World Bank itself admitted (1995), overlooks the
crucial importance of political factors.
Politics of privatization
Political factors are the focus of this paper, as they constitute an integral part
of privatization processes and their outcomes (Ramanadham 2002). Shirley
(1997) developed a set of three necessary political conditions for successful
privatization programmes: political desirability, political feasibility and
political credibility. To be politically desirable, the benefits of privatization
must outweigh its costs. From the perspective of the current political
leadership, this means that its core constituency must at least tolerate reform
efforts (World Bank 1995). Ideally, the public perceives privatization to be in
its own interest. In order to be politically feasible, the leadership must have
the ability to make and implement reform policies and overcome opposition.
This can best be achieved if public support for the reform ideology exists, as
otherwise resorting to coercion can incur high social costs and undermine
long-term sustainability of privatization efforts (Cook et al. 1998). If SOE
interest groups do not feel represented by the political apparatus, opposition
outside the political process can undermine privatization efforts (World
4
Bank 1995), as in Costa Rica and Uruguay in the early 1990s (Martin 1993).
Political credibility rests on the trust relevant actors put in the government.
Public anxieties that cost and benefits of privatization are distributed
unequally must be dispersed by credible programmes of compensation
(Durant and Legge 2002). Public participation in political decisions to
privatize can help to foster social inclusion and investor security
(Kirkpatrick and Parker 2004).
These political conditions underline the importance of public opinion for
privatization processes, as “prevailing societal values […] have proven to be
[…] determinants of outcomes and cannot be ignored at the policy making
level” (Chang 2006:208). This view is not uncontested, however, as
privatization might be perceived as a ‘hard topic’ to be dealt with by elites
and to be implemented ‘top-down’ without citizen consultation (Durant and
Legge 2002). Nonetheless, case studies have shown that citizen opinions –
or at least perceptions thereof – are incorporated into political calculations,
as public agency shapes the political environment (Zahariadis 1995).
Although public understanding may be lacking detail, considerations like
social security, participation in economic activities and national pride shape
the symbolic meaning of privatization programmes (Durant and Legge 2002,
Cook et al. 1998). Consequentially, public opinion is crucial in providing
stable political opportunities for privatization (Manzetti 1999, Kaufman and
Zuckermann 1998).
5
Privatization in the Mexican context
Public opinion in each nation is influenced by individual internal and
external circumstances (Ramírez 2003). Mexico is a Latin American
economic heavy-weight and second in terms of per capita GDP in 2007 only
to Brazil (World Bank 2011). Mexico’s North American Free Trade
Agreement (NAFTA) membership boosted its export sector, yet led to a
strong dependency from the United States’ (US) economy (Bulmer-Thomas
2006). It further strengthened foreign property rights and laid a foundation
for foreign direct investment and privatization projects (Haber et al. 2008).
While overall privatization in Latin America is declining (Bulmer-Thomas
2006), Mexico resumed a sizeable privatization programme in 2005, peaking
in value in 2007 (figure 1).
Figure 1: Privatization proceeds and political rights in Mexico, 1992-2007
6
Interestingly, privatization in Mexico was initially pursued by the left-wing
‘Partido Revolucionario Institucional’ (PRI) through private market sales
and share issues (Cook et al. 1998, Graham 2003). Although some rate these
privatization programmes as economic success (World Bank 1995),
convincing evidence suggests less optimal outcomes. Patronage and
corruption led to the sale of many SOEs to local business cartels, which keep
prices artificially inflated and create significant public discontent (Ramírez
2003). This discontent has gained political importance, because political
rights and therefore electoral power in Mexico have been steadily increasing
(figure 1). The 2006 elected conservative government thus faces elevated
political costs if failures in its privatization programmes are attributed, at
least partially, to political aspects of privatization (Haber et al. 2008).
Despite this highly interesting political and social background, existing
studies of privatization in Mexico and Latin America overwhelmingly
concentrate on economic (Chang 2006) and macro-political (Ramírez 2003)
aspects. Public opinion research on privatization has largely been restricted
to a few developed countries (Durant and Legge 2002, Judge et al. 1983).
This paper contributes to bridging this gap by creating an understanding of
the factors that shape public opinion of privatization in Mexico.
Factors shaping the public opinion of privatization
Having established the importance of public opinion for privatization
programmes, this section will develop a framework containing a selection of
central influence factors. Subsequently, the theoretical relevance of each
7
factor and important univariate statistics of the corresponding variable will
be highlighted.
Building the framework
Durant and Legge’s (2002) model to assess public opinion of privatization,
used with French national election data, offers a robust foundation on which
to build. Of the six groups of variables it is based on, the five significant
groups are adopted in this essay’s framework. The only insignificant group
(‘economic self-perception’) is substituted by a new influence factor. The
transfer of the model from the French to the Mexican context furthermore
allows a comparison of results, highlighting parallels and differences in
public opinion between the two countries.
The complete framework with the six groups, each containing one
independent variable, is illustrated in figure 2.
Figure 2: The theoretical framework
8
The variables are operationalized using data from ‘Latinobarómetro 2007’,
an annual public opinion survey of 18 Latin American countries
(Latinobarómetro 2011). The cases for Mexico are 1,200 respondents aged
18 and over, determined by a three-stage probabilistic sample with quotas.
This sampling method produces independent random results and allows an
adequate representation of the general population within reasonable limits of
probability (Latinobarómetro 2007). The variables derived from this data are
therefore suitable for statistical analysis.
The framework’s groups and variables
Public support for privatization is the dependent variable in the framework,
which represents the outcome of the different influencing factors. It is
measured using the ordinal-level variable Privatization, which reflects
respondents’ opinions whether the privatization of SOEs has been beneficial
for Mexico. Respondents that agree are referred to as (strong or moderate)
supporters of privatization, while those disagreeing are labelled opponents.
The long experience and ongoing confrontation with privatization should
facilitate the formation of a valid opinion in the Mexican public. This is
supported in figure 3, which shows the variable’s frequency distribution and
univariate statistics.
Figure 3: Privatization as dependent variable
9
Although it is measured at the ordinal level, which is common for most
variables originating from questionnaires, it will be treated as interval-ratio
variable to allow the use of additional statistics (e.g. standard deviation).
While in marginal cases this might influence the interpretation, in general
the error should be negligible (Labovitz 1970). It is noteworthy that the
public support for privatization approaches a normally distributed shape.
The score mean of 2.37 is close to the category mean (2.5), and the standard
deviation of 0.8 indicates that the majority of scores is closely scattered
around it. Moderate supporters and opponents are exactly equal in numbers,
while strong opponents cause a slightly negative skew. This distribution
shows that the opinion towards privatization is not politically polarized by
contagion effects (e.g. mass media campaigns, current events) and is
therefore likely to represent actual valid opinions (DiMaggio et al. 1996).
Turning now to the first group in the framework, ‘utilitarianism’ is based
on the assumption that citizens judge privatization programmes depending
on their perception of how costs and benefits affect them directly (Gabel
10
1998). Although difficult to predict, the long experience with privatization
should enable Mexicans to estimate these effects (Kaufman and Zuckermann
1998). As privatization is often conducted due to perceived inefficiencies
like excess employment (Shleifer and Vishny 1994), employees of SOEs are
likely to oppose it for fear of job losses or deteriorating working conditions
(Cook et al. 1998, OECD 2009). A negative relationship between
employment in a public company and support for privatization is expected.
Furthermore, Kaufman and Zuckermann (1998) show that fear of
unemployment undermines reform support, thus unemployed persons are
likely to view SOEs as potential future employers and oppose privatization.
Lastly, SOEs may produce crowding-out effects, i.e. they occupy markets
and reduce the opportunity for private sector enterprises (Chang 2006). A
positive relationship between self-employment and support for privatization
is therefore expected. For the other employment options no clear direction of
association is evident. The nominal-level variable Employment represents
the respondents’ employment status (figure 4). The mode indicates that the
self-employed form the majority with over thirty percent, while employees
of public companies make up seven and unemployed about four percent.
This underlines that significant privatization has already taken place.
Figure 4: Independent variables in the framework’s groups
11
The second framework group is ‘emulation’, reflecting the idea that if
privatization is perceived to be beneficial in other countries, it is also
supported at home (Durant and Legge 2002). Accordingly, the economic
12
pre-crisis prosperity until 2007 should have augmented the reputation of US
market reforms, including privatizations (Simmons et al. 2008). However,
Martin (1993) points at differences in privatization proceedings depending
on whether the political pressure is external or internal, with the latter
allowing social considerations more weight. Mexico’s privatization
programme was largely defined by external IMF conditions and NAFTA
rules (Haber et al. 2008). This might create opposition to further
privatization, if the public sees social security endangered (World Bank
1995). Nonetheless, a positive relationship between favourable judgements
of US market reforms and support for privatization is expected. This context
is operationalized by the independent ordinal-level variable US Influence,
which measures the respondents’ judgement of US influence in Latin
America. While this is clearly a much broader statement than one directed
explicitly at US privatization programmes, such detailed data is not
available. The median (figure 4) highlights that the majority of respondents
sees US influence as moderately positive, yet strong opponents outnumber
strong supporters.
‘Ideology’, the third group, shows the respondents’ political inclination in
terms of the common left-right-dichotomy (Garrett 1998). Support for
market reform is generally attributed to right political values (Hooghe et al.
2002). While Robinson argues that ideology does not matter, as also left
parties (like the PRI-party in Mexico) conducted privatization (2003),
individual-level studies have identified traditional left-right divides as
primary determinants of opinion formation (Gabel 1998). Accordingly,
although long experience tends to base public judgements more on real
13
policy impacts, support for the PRI has historically come from leftist social
sectors with a major stake in government patronage (Kaufman and
Zuckermann 1998). Right political identity is therefore expected to correlate
positively and left identity negatively with support for privatization. The
group is operationalized through the ordinal-level variable Left/RightOrientation, which measures the respondent’s self-classification on a 0 (left)
to 10 (right) scale. The frequency distribution and the basic statistics
(figure4) show that the vast majority is allocated in the centre of the scale, as
expressed by the median. The univariate results thus suggest a low degree of
radicalization in the Mexican public. The mean is also close by, yet
dispersion is substantial.
The fourth group, ‘value orientation’, follows Inglehart’s theory that
individuals in industrialized nations may go beyond utilitarian reasoning and
base judgements on socialized values (1990). Accordingly, a ‘materialist’
person shows an inclination towards market-centred solutions and therefore
tends to support the economic efficiency arguments for privatization
outlined in section one (Megginson and Netter 2003). A ‘post-materialist’, in
turn, prioritizes collective and social values (Durant and Legge 2002). A
positive relationship between market-oriented values and support for
privatization is therefore expected. Figure 4 shows the ordinal-level variable
Market Economy as proxy for ‘value orientation’, which measures the
respondent’s perception of the market economy as necessary development
factor. The data shows that a majority of Mexicans, 61 percent, moderately
or strongly supports a market economy and is therefore likely to support its
associated values.
14
‘Government support’, the fifth group, represents the general finding in
studies that attitudes towards policies are often a function of general
government support (Kaufman and Zuckermann 1998). This applies
especially since privatization is commonly perceived as a ‘hard topic’, where
public opinion tends to follow the judgments of leaders (Durant and Legge
2002). Furthermore, supporters of the government may expect patronage
benefits (Shleifer and Vishny 1994). Hence, a positive relationship between
government support and support for privatization is expected. This is backed
by findings that the public opposes further privatizations when trust in the
government erodes or promised compensation for losers of privatization
processes is not credible (World Bank 1995, Ramírez 2003). The ordinallevel variable Government Welfare (figure 4) measures whether respondents
feel the government is interested in their welfare. Although strong opponents
outnumber strong supporters, the mean is almost exactly in between these
extremes, due to the fact that moderate supporters are the dominant group.
Opinions are generally moderate rather than extreme, as the dispersion
around the mean is small.
The sixth group in the framework is ‘government service quality’, which
replaced ‘economic self-perception’ from Durant and Legge’s framework. It
follows the idea that citizens who experience poor government service
quality are more likely to be supportive of private sector service provision
(Becker 1958). This reflects the economic argument that privatization is
necessary when state ownership fails (Megginson and Netter 2003). For
example, dissatisfaction with government service quality was a major factor
for initial privatization in Britain (Vickers and Yarrow 1988). Yet evidence
15
from privatization also shows that monopolistic structures are often
maintained even after privatization (Haber et al. 2008). Hence, it is not
entirely clear whether faulty services are blamed on remaining SOEs or on
already privatized companies. Nonetheless, a negative correlation between a
positive perception of government service quality and support for
privatization is expected. The independent ordinal-level variable Municipal
Services represents the satisfaction with government service quality.
Although government services encompass a broader area, municipal services
have the highest everyday importance for most citizens. The variable should
therefore be a valid proxy. As figure 4 shows, about 58 percent of the
Mexicans are either not very or not at all satisfied with these services.
This overview of the framework’s groups has highlighted the individual
form of its variables and established a set of theoretical relationships. Next,
it will be determined whether these research hypotheses withstand empirical
testing.
Empirical tests of the framework
This section aims to provide empirical evidence in order to support or
dismiss the previously formulated hypothetical relationships. Each
individual relationship is tested using bivariate statistical techniques, while
the whole framework is assessed in a multivariate analysis.
Bivariate Analysis
The first step to test the framework’s assumptions is to determine whether
the relationship between each influence factor and the support for
16
privatization actually exists, and if its direction is in accordance with the
theoretical predictions of the research hypotheses. The strength of the
association can be seen as an indicator of the factor’s importance (Field
2009).
The analysis begins with the relationship between ‘utilitarianism’,
measured by the respondents’ employment situation, and support for
privatization. The theory predicts that public sector employees and
unemployed are likely to oppose privatization, whereas self-employed
workers should on average support it. To test these research hypotheses, the
relationship between the nominal-level variable Employment and the
dependant variable Privatization is analyzed. The individual effects are
separated by additional tests using dummy variables of public sector
employees, unemployed and self-employed workers (figure 5).
Figure 5: Bivariate relationship: Employment and Privatization
17
To refute the null hypothesis (H0), which states that the two variables have
no significant relationship, a chi-square (χ²) test is conducted. Testing the
relationship between Employment and Privatization, the chi-square
significance (0.26) predicts that an average of 26 percent of cases show no
relationship between the two variables. This clearly exceeds the alpha-level
of maximal five percent accepted in this essay, so H0 cannot be rejected.
Furthermore, the strength of association is weak, indicated by Cramer’s V
(0.082). The test of the individual employment categories also delivers weak
and insignificant results. The expected relationships between employment
status and support for privatization in Mexico thus cannot be empirically
supported in this study.
The next group, ‘emulation’, predicts a positive relationship between the
respondents’ beneficial assessment of US influence in Latin America and
support for privatization (figure 6).
Figure 6: Bivariate relationship: US Influence and Privatization
The pattern in the bivariate table already indicates that respondents who
judge US influence negatively are most likely to be strong opponents of
18
privatization. The chi-square test shows the highest level of significance,
indicating that H0 can be rejected and a relationship between the variables is
extremely likely. The gamma value (0.17), used for ordinal variables,
describes a weak and positive relationship. This value is also highly
significant, which supports the claim that the relationship can be generalized
from the sample to the whole Mexican population. Although these results
cannot be considered proof for causation, they are very consistent with the
theoretical predictions.
The respondent’s orientation towards left or right political values is
captured in the group ‘ideology’. As has been detailed before, common
theoretical approaches see a positive relationship between right political
ideas and support for privatization, and this relationship is expected to hold
here.
Figure 7: Bivariate relationship: Left/Right-Orientation and Privatization
Patterns in the bivariate table are not easily discernible, but the analysis
results confirm the expectations. Although weak (gamma value of 0.15),
Figure 7 shows a positive and highly significant relationship.
Next, respondents who regard a market economy as necessary for
19
development, reflected in the group ‘value orientation’, are expected to be
likely supporters of privatization (figure 8).
Figure 8: Bivariate relationship: Market Economy and Privatization
The result of the bivariate analysis is clearly consistent with the theory. A
significant and moderately strong positive relationship can be deducted from
the data, which supports the research hypothesis.
The group ‘government support’ represents the respondents’ perception
that the government is following the citizens’ interests (figure 9). As
outlined before, I assume that government supporters also support the
government’s privatization programmes.
Figure 9: Bivariate relationship: Government Support and Privatization
While the percentage of strong supporters of privatization is curiously the
20
largest for strong government opponents, the percentages in the bivariate
table overall suggest a higher support of privatization from government
supporters. This is backed by the statistical results, which testify a
significant weak to moderate relationship in the expected positive direction.
Lastly, I turn to the analysis of ‘government service quality’, which is
represented by the respondents’ satisfaction with municipal services. It is
expected that satisfied recipients of local services will tend to oppose
privatization, and both variables therefore correlate negatively.
Figure 10: Bivariate relationship: Municipal Services and Privatization
The relationship is again highly significant, yet contrary to the theoretical
expectations the two variables have a weak to moderate positive association
(figure 10). Respondents highly dissatisfied with municipal services are the
strongest opponents of privatization, while those most satisfied are also the
strongest supporters. The relationship is most likely to apply to the whole
21
population, as the gamma value (0.265) is highly significant.
Multivariate Analysis
The bivariate analysis has supported the majority of the theoretical
predictions, although one group did not prove significant and another
suggested a relationship in the opposite direction. In order to assess the
actual influence of each group, I analyze the entire framework
simultaneously using a multivariate linear regression.
Linear regression techniques are most appropriately used with intervalratio level or dummy variables (Healy 2009). While it is common practice to
use ordinal-level data in many studies, the interpretation of ordinal scales as
intervals makes caution in interpreting the results necessary (Kim 1975).
However, the high number of cases in this study and the fact that the
dependant variable is normally distributed should reduce potential sources of
error to an acceptable degree (Henry 1982). For this analysis, it is assumed
that each independent variable has a linear relationship with the dependent
variable and the variables do not interact. Furthermore, the effects - or
intercorrelation - between the independent variables need to be low1.
To increase the validity of the findings, two control variables are
introduced2: socioeconomic status, which was used in Durant and Legge’s
original model (2002), and urbanization, which had a strong impact in other
studies (Kaufman and Zuckermann 1998). Using control variables removes
effects caused by these factors, and therefore produces a more realistic
picture (figure 11). The ANOVA test shows the highest level of significance,
1
The intercorrelation in this study is acceptable, see appendix A.2.
2
22
which supports the assumption that the framework can be applied to the
whole Mexican population. The analysis further reveals that the control
variables hardly altered the significant bivariate relationships, while the
employment dummies as well as the socioeconomic control variable
remained insignificant. The correlation coefficient R (.406) indicates a
moderately strong relationship, while the coefficient of determination R²
(.17) expresses that 17 percent of the support for privatization - the variation
in the dependant variable - are explained by the independent variables of the
framework.
Figure 11: Multivariate analysis of the framework
The results of the regression allow us to predict the likely support for
privatization if the values of the independent variables are known, using the
unstandardized least-squares regression equation (figure 17)
Figure 17: Least-squares regression equations
23
The coefficients in the formula show that all significant independent
variables, excluding the control variable, have a positive influence on
privatization. This means that when each factor increases, so does the
support for privatization. The standardized values of the framework’s
coefficients further enable the comparison of the individual influence each
independent variable has in the model. Thus Market Economy (0.260) has
clearly the highest impact on Privatization, followed by Municipal Services
(0.154) and US Influence (.107).
The bivariate and multivariate analysis both confirmed that the framework
used in this essay is a good model of influence factors on public opinion
regarding privatization. The empirical findings it provides can now be
theoretically re-interpreted.
Findings
The preceding analysis was conducted on the basis of Durant and Legge’s
(2002) model, which was modified and extended by the new group
‘government service quality’. An unexpected result is the lack of
significance of the respondent’s employment status for his support of
24
privatization. In Durant and Legge’s model, public employment was a highly
significant, albeit weak, factor (2002). A possible explanation may be the
practice of co-opting public-sector labour union leaders by the Mexican state
(Teichman 1995). This could lead to reduced general disagreement with state
policies, in contrast to the effect of the independent French unions (Béland
2001). Alternatively, a value shift in Mexican society may have caused
privatization to be judged less from the viewpoint of personal employment
but rather based on broader post-materialist values (Inglehart and Baker
2000).
Another interesting finding is the rather weak influence of left/right
political orientation on the support for privatization, especially compared to
the belief in the market economy, which resulted as strongest factor in the
framework. Both factors are of equal strength in the French context (Durant
and Legge 2002), indicating a possible connection. Mexicans in contrast
seem to judge privatization more differentiated than on a simple left/rightdivide, which supports Robinson’s claim that this factor loses relevance
when left political parties also enforce privatization (2003). Again,
Inglehart’s ‘materialist’/’post-materialist’ division seems to dominate
perceptions, indicating that broader socialized values are considered in the
formation of opinions (1990).
Government support also proved to be a weaker predictor than expected,
strengthening the argument that loyalties are not unconditional, but are
continuously reshaped (Kaufman and Zuckermann 1998). Furthermore,
widespread disappointment with an often corrupt elite may have caused a
detachment of government perception from actual policy implementation
25
(Montaner 2000). In contrast, the judgment of US influence was in line with
the predictions, showing that admiration for US prosperity has an influence
on acceptance of US economic policies (Crandall et al. 2005).
The introduction of the new group ‘government service quality’ proved to
be an important contribution to the framework, as it turned out to be the
second strongest predictor. Hence, public perception of government services
seems to have a decisive influence on the support for privatization, and the
factor should be included in future studies. Nonetheless, the direction of the
relationship turned out to be the opposite of the theoretical prediction.
Respondents who are satisfied with local service quality are likely to support
privatization, indicating that the service provision is not clearly linked to the
government. Although unexpected, this is in line with results from twelve
African surveys, which saw a majority opt for more expensive high standard
private services instead of low standard free government services (Bratton et
al. 2004). Similarly, a general decline in state services in Mexico since 1985
has caused civil society groups to take over the supply of some public goods
(Gordon 1997). Good service quality may therefore be attributed to private
efforts rather than government success, a relationship clearly worth further
investigation.
Lastly, conclusions from the entire framework can be drawn. The analysis
proved that Durant and Legge’s framework (2002) is a solid basis for
investigations of public support for privatization. Most theoretical
predictions were accurate, although the strength of the individual factors
varied strongly between French and Mexican contexts. Furthermore,
employment status had no significant effect in Mexico, while the inclusion
26
of government service quality was a valuable addition. This emphasizes that
simple generalizations from national findings to other countries are not
valid, and individual studies are essential (Ramírez 2003). The explanatory
power of the framework developed in this essay is acceptable for a public
opinion analysis, proving it to be a significant adaption of the original to the
Mexican context. Nonetheless, as 83 percent of variation remains
unexplained, additional studies are sure to yield further insights and work
towards a more complete picture of the underlying processes.
Conclusion
The findings in this essay have highlighted factors influencing the
formation of public opinion of privatization in Mexico and thereby achieved
the goal of adding a political perspective to the almost exclusively economic
literature in this domain. These insights may help to understand whether
privatization reflects the will of the citizens and how cross-class support may
be achieved. The success rate and overall performance of future privatization
programmes may thereby be increased. Future research should expand the
knowledge of public opinion formation towards privatization, especially in
the developing world, to uncover additional influence factors and allow a
much wider international comparison.
27
Appendix
A.1 Bivariate table: Employment and Privatization
A.2 Correlation matrix for the independent variables
i
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