SFB 303 Discussion Paper No. A - 376

Author: Bös, Dieter
Title: Privatisation in Europe: A Comparison of Approaches
Abstract: The paper compares privatisation in selected European countries, namely the UK and West Germany from the West, and Czechoslovakia, East Germany, Hungary and Poland from Central and Eastern Europe. It argues that privatisation can only be efficient if it implies divestiture. Changes in objectives, as brought about by privatisation, are treated by comparing various principal-agent settings which show that it is superficial to say that privatization of monopolistic enterprises in capitalistic economies implies a move from welfare maximisation to profit maximisation. (A similar argument on too superficial statements holds for post-communist countries.) Finally, distributional policies are treated. It is argued that popular capitalism is a bad instrument for redistribution and that employees' shares in post-communist countries are not equitable. Distributional pricing is abolished if a privatised firm operates in a competitive market. However, distributional pricing is implicitly applied by a monopolistic privatised firm which is regulated (RPI-X) and maximises profits.
Creation-Date: 1992
Unfortunately this paper is not available. Please order a hardcopy via e-mail.

SFB 303 Homepage

31.03.1998, Webmaster