Obstacles to privatisation of state‐owned industries in Algeria: the political economy of a distributive conflict

Abstract

This analysis seeks to explain why privatisation of state‐owned industrial enterprises in Algeria ‐ a process pushed by the IMF and the World Bank and launched in 1994 ‐has not led to a single complete divestiture of shares of corporatised public enterprises by 2001. Privatisation of these enterprises has been impeded by (1) intra‐elite struggles and violent conflicts between state elites and armed groups over the distribution of rents, rendering decision making and coherent reform strategies impossible; (2) military and bureaucratic elite clans that profit from import monopoly and oligopoly rents and display little interest in increased domestic production; (3) the role of industrial enterprises in (clientelist) social networks; (4) the strong remnants of a nationalist, étatist, socialist and collectivist ideology.