Economics at your fingertips  

Jaké jsou náklady a výnosy privatizace?

What are the costs and benefits of privatization?

Marek Kapicka

Politická ekonomie, 2000, vol. 2000, issue 2

Abstract: The article analyzes the issue of privatization from theoretical point of view. An incomplete contracts approach is used in the analysis. Formal model is presented, showing how contractual incompleteness affects the extent of restructuring. The conclusion is, that if the government cannot commit not to subsidize the firm in exchange for higher production, restructuring effort will be lower than optimal. The reason is that higher restructuring decreases future subsidies. The government thus creates soft budget constraint for the owner. However, privatization improves upon state ownership. If we introduce partial privatization, more complicated governance structures emerge. Rights to cash-flow and rights to control are distinguished. One of the principal conclusions is that these rights are highly complementary. Privatization should therefore include transfer of both of these rights toward the new owner.

Keywords: privatization; contract theory; incomplete contracts; bargaining (search for similar items in EconPapers)
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (text/html)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3

DOI: 10.18267/j.polek.129

Access Statistics for this article

Politická ekonomie is currently edited by Jiřina Bulisová

More articles in Politická ekonomie from University of Economics, Prague Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().

Page updated 2020-07-02
Handle: RePEc:prg:jnlpol:v:2000:y:2000:i:2:id:129