SFB 303 Discussion Paper No. A - 045
Author: Bös, Dieter
Title: A Theory of the Privatization of Public Enterprises
Abstract: This paper deals with privatization where the government faces both the allocational option of efficiency
change and the distributional option of distributing non-labor incomes more evenly. The paper is organized as
follows. In section 2 we describe the economic background and the agents of our model, namely consumers,
producers and the government. In section 3 we present the optimization approach of the government. The
allocative consequences of this optimization are then treated in section 4. We explicitly consider the optimal
extent of privatization and the privatization efficiency. In a subsequent section 5 the distributional consequences
of privatization are dealt with. A short conclusion follows.
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