The Privatization of Financial Institutions

Domenico Mario Nuti ()
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Domenico Mario Nuti: University of Rome

Chapter 21 in Collected Works of Domenico Mario Nuti, Volume I, 2023, pp 513-518 from Palgrave Macmillan

Abstract: Abstract The privatization of state financial institutions is partly the same as for other state enterprises, namely the expectation—backed by recent literature on principal agent relations—of higher efficiency, through the subjection of state managers to bankruptcy rules and stock market discipline; the raising of budget revenue to contain or pay off government debt, or to allow a less severe deflationary stance than otherwise might be necessary; and the search for a model of property-owning democracy. However, the privatization of state financial institutions raises special issues, and, in particular, issues in the transformation of centrally planned socialist economies into private property market economies (see Nuti 1991). Alongside privatization of state assets and institutions, the growth of a private financial sector in any system is further increased by newly founded private activities.

Date: 2023
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DOI: 10.1007/978-3-031-12334-4_21

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