Does Privatization Lead To Less Corruption?


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amber Jhon answered
Yes this is very true that privatization leads to corruption and the reason is that privatization brings institutionalization changes. Basically privatization increases the control of management over the employees and different strategies are adopted to maximize the profit of shareholders. This increases the sense of responsibility in the management and obviously the employees are also motivated to get promotions and employees benefits (which are relatively more in private companies). These all factors together positively impact the performance of the employees and decreases the issues like corruption and bribe. In government institutions, employees do not have the fear of being expelled but they do have such fear in privatization. In this way greater control and check over the employees in private companies decreases the corruption. A very good research was conducted on the same topic in 22 emerging countries(It will also give you quantitative data that to what extent privatization is effective).

Impact of privatization on corruption

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