Abstract
In the last few decades the transformation of ownership rights of state owned enterprises
(SOEs) to private sector, the privatization, is being considered as an important craft to
reduce fiscal deficits, increase organizational efficiency, and to control macroeconomic
barometers. In Pakistan, especially after 1988, most of the governments have adopted
the privatization as mainstay artifice to reduce fiscal imbalances, augment organizational
competence and bring macroeconomic stability. The favorable fiscal impact of privatization
has been expected from the sale proceeds being used to retire national debt, as well
as elimination of losses of the public sector units as these losses are financed from the
budget. It is also considered important to foster competition, strengthen capital markets
and to encourage foreign direct investment. Since privatization is an exercise with
multifaceted implications, many of the studies have been made to evaluate its diversified
impacts. But most of the researches carried out have explored its affects on fiscal
shortfalls, organizational efficiency and economic growth. Only a few studies have been
conducted to see its impacts on economic development, especially on inflation, the
single most important macroeconomic indicator which can destabilize the life of masses
substantially, if not completely. This research article attempts to highlight the influences
of privatization on inflationary pressure and its repercussions. It has been argued that
privatization accelerates the inflation thus affecting the development negatively. We are
making an effort to test the credibility of the fact through scientific tools. Last thirty years
data have been taken for analysis purpose. The econometrics model using "Regression
Analysis" would be developed to analyze and interpret the data.
Muhammad Shujaat Mubarik, Asim Mumtaz. (2011) Does Privatization Impinge Price Levels?, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-09, Issue-2.
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