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Phdfinal-Kibikyo-081 Roskilde University Assessing privatization in Uganda Kibikyo, David Lameck Publication date: 2009 Document Version Publisher's PDF, also known as Version of record Citation for published version (APA): Kibikyo, D. L. (2009). Assessing privatization in Uganda. Roskilde Universitet. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain. • You may freely distribute the URL identifying the publication in the public portal. Take down policy If you believe that this document breaches copyright please contact [email protected] providing details, and we will remove access to the work immediately and investigate your claim. Download date: 29. Sep. 2021 Assessing Privatization in Uganda David Lameck KIBIKY0 [email protected] Supervisor: Associate Professor Thorkil Gustav Casse, PhD IDS, Roskilde University, Denmark [email protected] A Thesis submitted to the Department of International Development Studies (IDS) for the Award of a Degree of Doctor of Philosophy (PhD) of Roskilde University Centre (RUC), Denmark 30 August 2008 Table of Contents Table of Contents .......................................................................................................... i LIST of TABLES........................................................................................................ iv Acknowledgements................................................................................................... xiii Declaration ..................................................................................................................xv Abstract ..................................................................................................................... xvi Chapter 1 .......................................................................................................................1 1. Introduction and Theoretical Framework...........................................................1 1.1Brief review of Uganda’s economy before privatization......................................2 1.1.1 Structure of the Uganda Economy, Size and Role of the Public Sector ....2 1.1.2 General Problems of the SOE Sector .........................................................8 1.1.3 Macro-level Troubles of the Ugandan Economy 1980-6............................9 1.2 Privatization Policy and Strategy and the Nature of Property Rights in PSOEs10 1.2.1. Timing, Sequencing and Speed .............................................................10 1.2.2. Privatization objectives, policy and strategy .......................................11 1.2.3. Institutional framework and Movers: World Bank and Museveni .......16 1.2.3. Divestiture and Nature of Property Rights in the Private Sector ........20 1.3 Problem formulation, objectives and significance ..........................................24 1.3.1 Objectives ..................................................................................................27 1.3.2 Significance ...............................................................................................27 1.4Structure of the Thesis.........................................................................................28 1.5Theoretical Analysis: Privatization, Budget Deficits and Firm Performance.....28 1.5.1. The Genesis of Privatization: From State to the Private Sector ..........29 1.5.2. The state and Development ..................................................................30 1.5.3. Privatization and Budget Deficits ........................................................31 1.5.4. Privatization and Corporate Governance ............................................33 1.5.5. Privatization, Regulation and Firm Performance ................................37 1.5.6. Privatization, Structure and Firm Performance ..................................39 1.5.7. Privatization, Motivation and firm Performance.................................41 1.5.8. Privatization and Firm Performance ...................................................43 1.6 Summary ......................................................................................................45 Chapter 2 .....................................................................................................................46 2. Methodology....................................................................................................46 2.1. Research Questions and Design...................................................................46 2.1.1. Research Questions: Where I could and could not answer .................46 2.1.2. Research Design ...................................................................................47 2.2 Data Collection Techniques and Instruments..................................................47 2.2.1 Population and sample size ..................................................................47 2.2.2 Data Sources and Types .......................................................................48 2.2.3 Limitations ............................................................................................51 2.3 Setting Privatization Date and Measuring Variables .......................................53 2.3.1. TFP, ROS, ROCE Variables and APC and RPC Derivatives ..............53 2.3.2. Measuring Variables ............................................................................54 2.4. Data Analysis ...............................................................................................56 2.4.1. Normality and Difference Tests ............................................................57 2.4.2. Difference Tests ....................................................................................58 2.5. Scope............................................................................................................59 Chapter 3 .....................................................................................................................60 3. Fiscal Impact of Privatization ..........................................................................60 3.1 SOEs Subsidies before and after Privatization.............................................60 3.1.1. Subsidies before privatization ..............................................................60 3.1.2. Subsidies After privatization ................................................................69 Capital Restructuring ...........................................................................................75 3.2. Tax Revenue and Privatization Moneys............................................................80 3.2.1. Tax Revenue .........................................................................................81 3.2.2. Privatization Moneys .................................................................................83 3.3. Summary ......................................................................................................85 Chapter 4 .....................................................................................................................86 4. Privatization and Corporate Governance .........................................................86 4.1. Corporate Governance as Management before and after privatization........88 4.1.1. SOEs’ Objectives before and after Privatization........................................89 4.1.2 Board function before and after Privatization.................................................92 4.1.2.1. Organizational structure ..................................................................95 4.1.2.2. Political appointments .............................................................................96 4.1.2.3. Absentee boards ......................................................................................97 4.1.2.4. Donor Interests .................................................................................98 4.2. Corporate Governance as Separation of Ownership from Management....102 4.2.1. Transaction Costs before and after privatization................................103 4.2.1.1.Communication transaction costs before and after privatization...........104 4.2.1.2.Auditing Transaction costs before and after privatization .....................104 4.2.1.3.Advertising and Legal transactions costs before and after privatization107 4.3. Summary ....................................................................................................108 Theoretical implications.........................................................................................109 Chapter 5 ...................................................................................................................111 5. Regulation, Privatization and Firm Performance................................................111 5. Regulation of Business in Uganda .................................................................111 5.1.1. Tariff (TBs) and Non Tariff Barriers (NTBs) .....................................112 5.1.2. Licensing: competition, connectivity and conflict resolution ............118 5.1.3. Minimum Financial Requirements (MFRs) ........................................132 5.1.4. Price Control:
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