Foreign and Domestic Investment in Argentina
The Politics of Privatized Infrastructure

This book argues that for infrastructure privatization programs, differences in firm organizational structure explain the viability of privatization contracts in weak institutional environments.

Alison E. Post (Author)

9781107637962, Cambridge University Press

Paperback / softback, published 27 September 2018

264 pages, 4 b/w illus. 1 map 30 tables
23 x 15.3 x 1.5 cm, 0.42 kg

'Alison E. Post's insightful new book will shake up much received wisdom on the political economy of regulation and on property rights and firm strategies more generally. Strict property rights, backed up by powerful courts, are not the godsend they are presumed to be; they turn out, Post shows, to be brittle and ineffective. Moreover, diversified business groups, long thought to be waning vestiges of traditional capitalism, are in fact more flexible and committed partners in ongoing negotiations over inevitably evolving regulation. The exacting empirical research unveils the full complexities of Argentine politics but at the same time has broad implications for theorizing on firms, property rights, and regulation.' Ben Ross Schneider, Massachusetts Institute of Technology

Political economy scholarship suggests that private sector investment, and thus economic growth, is more likely to occur when formal institutions allow states to provide investors with credible commitments to protect property rights. This book argues that this maxim does not hold for infrastructure privatization programs. Rather, differences in firm organizational structure better explain the viability of privatization contracts in weak institutional environments. Domestic investors - or, if contracts are granted subnationally, domestic investors with diverse holdings in their contract jurisdiction - work most effectively in the volatile economic and political environments of the developing world. They are able to negotiate mutually beneficial adaptations to their contracts with host governments because cross-sector diversification provides them with informal contractual supports. The book finds strong empirical support for this argument through an analysis of fourteen water and sanitation privatization contracts in Argentina and a statistical analysis of sector trends in developing countries.

Introduction
1. Informal contractual supports in weak institutional environments
2. An overview of the Argentine privatizations
3. The fragility of nonlocal contracts prior to the crisis
4. Smoother sailing for all investors in less competitive provinces
5. Home court advantages magnify after the crisis
6. Diverse local holdings also prevail in calm political contexts
7. Explaining contractual resilience in low- and middle-income countries
8. Conclusion.

Subject Areas: Political economy [KCP], Comparative politics [JPB], Politics & government [JP], Hispanic & Latino studies [JFSL4]