The Privatization of Nicaragua’s Energy Sector: Market Imperfections and Popular Discontent Charles G. Ripley Neoliberal economic policy makers place a strong emphasis on the privatization of state- run enterprises. The private sector, advocates argue, is much more efficacious at develop- ing and distributing vital resources. However, do all Third World countries reap the benefits of privatization? Using the privatization of Nicaragua’s public energy companies (2000–2008) as a case study, I have found that, without adequate conditions, including the proper institutional framework, transparency, enforceable laws, and policies that compen- sate for market failures, privatization has not only failed to deliver benefits, but according to my survey data, has also caused dissatisfaction with the population. I conclude by advancing policy suggestions. Los creadores de la política económica neoliberal enfatizan con fuerza la privatización de empresas dirigidas por el estado. Ellos argumentan que el sector privado es mucho más eficaz para desarrollar y distribuir recursos vitales. Sin embargo, ¿se benefician todos los países tercermundistas de la privatización? Al analizar la privatización de las empresas públicas de energía en Nicaragua (2000–2008) como estudio de caso, he descubierto que, sin las condiciones adecuadas, entre éstas un marco institucional apropiado, transparen- cia, leyes que se apliquen, y políticas que compensen las fallas del mercado, la privatiza- ción no solamente ha fallado en sus beneficios, sino, según mis datos de encuestas, también ha provocado la insatisfacción en la población. Concluyo al proponer sugerencias de política. Key words: Nicaragua, privatization, energy, institutions, disadvantages, surveys, solutions Introduction F or almost three decades, developing countries have been carrying out neolib- eral economic policies. The neoliberal economic approach emphasizes limited governmental intervention, favorable conditions for foreign investment, the free flow of capital, utility maximization, low inflation, export-led growth, deregulated free market capitalism, and the privatization of state institutions. Advocates of neoliberalism find most state intervention in the economy suspect. The state precludes economic development at its best, or destroys it outright at its Latin American Policy—Volume 1, Number 1—Pages 114–132