Morten Bennedsen (Institute of Economics, University of Copenhagen)
Abstract
Political involvement in the operation of an enterprises, whether it is private or state owned, creates opportunities for interest groups to influence the allocation of resources. I analyze how the influence externality arising form the interest groups´lobby activities disables the Coase Theorem. Then I proceed to investigate how the allocation of property rights between a government and a group of private owners determines the equilibrium allocation of resources in a firm. In other word, I provide a theory of why ownership matters.
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Publisher Info
Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number
1998-17.
Length: 20 pages Date of creation: Oct 1998 Date of revision: Publication status: Published in: Journal of Public Economics, 76(3), June 2000, 559-581 Handle: RePEc:kud:kuieci:1998-17
Find related papers by JEL classification: D21 - Microeconomics - - Production and Organizations - - - Firm Behavior D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
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