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The Reversal of the Privatisation Logic in Central European Transition Economies (An Essay)

Miklós Szanyi ()
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Miklós Szanyi: Institute for World Economy, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Budapest

Acta Oeconomica, 2016, vol. 66, issue 1, 33-55

Abstract: The main ambition of this study is to explain the unexpected change in the transition process of some Central and Eastern European (CEE) countries starting in the second half of the 2000s. Special attention is paid to changes in and the attitudes of governments toward state ownership. Although statist approaches gained momentum in the economic policy of various states in and after the 2008/2009 crisis, this did not mean a fundamental reorientation expressed in changes in the main economic conditions such as ownership patterns. Nevertheless, governments in some CEE countries seem to flirt with such ideas too in the general policy of increasing state economic intervention. The privatisation process was stopped and in a number of cases, formerly privatised assets were re-nationalised. Governments strengthened their influence in the governance structure in mixed-ownership companies. The main body of the present paper provides a better understanding of this change in state property policies. We also call attention to the risks of a reversal of the privatisation logic. An increasing role of the state as proprietor may today strengthen similar negative political and economic consequences and risks as the ones against which the privatisation agenda of the 1990s was suggested. It can reduce competition, give way for political and personal rentseeking, and weaken the functions of market economic institutions.

Keywords: Central and Eastern Europe; privatisation; public property; crony capitalism; rent-seeking; varieties of capitalism (search for similar items in EconPapers)
JEL-codes: D72 H82 P16 P31 (search for similar items in EconPapers)
Date: 2016
Note: The paper was written within the framework of the research supported by the Hungarian National Research, Development and Innovation Office (Grant No. 112069).
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