Template-Type: ReDIF-Paper 1.0
Title: Incomplete Contracts and Privatization
Author-Name: Klaus M. Schmidt
Abstract: The paper offers a selective survey on the incomplete contracts
  	approach to privatization. Furthermore, a simple model of
  	privatization to an owner-manager is developed in which different
  	allocations of ownership rights lead to different allocations of
  	inside information about the firm which in turn affect allocative
  	and productive efficiency. In this model, privatization is a
  	commitment device of the government to credibly reward the manager
  	for a successful cost reduction and to harden his budget constraint.
Keywords: Incomplete Contracts, Privatization, Regulation, Soft Budget
  	Constraint.
Classification-JEL: L33; L50
Series: A
Number: 480
Creation-Date: 1995-03
Length: 15
Handle: RePEc:bon:bonsfa:480