Bank lending for divestiture: a review of experience

Sunita Kikeri

No 338, Policy Research Working Paper Series from The World Bank

Abstract: The objectives of this paper are to: (a) describe therationale for and key components of Bank support for divestiture; (b) examine the documented experiences and reform outcomes, and highlight the key implementation and management issues facing borrower governments and the Bank; and (c) draw some conclusions for the future role of the Bank in this reform area. After reviewing Bank support for divestiture, this paper concludes that divestiture operations are best tailored to country conditions. Sometimes divestiture yields minimal results. For example, small- and medium-sized public enterprises (PEs) may be divested, reducing the government's burden little; partial divestments may mean continued government interference; governments may assume liabilities higher than the sale price; or new investors may be given privileges and monopoly rights that produce more inefficiency. Sometimes the best policy may be to improve the environment in which PEs function. Ownership changes are only one element of broader PE reform, the implementation of which could create a better climate for divestiture later. The Bank could assist by spelling out the institutional set-up for managing divestiture.

Keywords: Municipal Financial Management; Private Sector Economics; Economic Theory&Research; Banks&Banking Reform; Financial Crisis Management&Restructuring (search for similar items in EconPapers)
Date: 1990-05-31
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://documents.worldbank.org/curated/en/386991468740100818/pdf/multi-page.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:wbk:wbrwps:338

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().