The Characteristic Traits of Privatization in the Economies of Eastern Europe

Although the extraordinary popularity of privatization in Eastern Europe evokes familiar images in the Western economies, in a number of respects the process in our region will be less similar to the "classic" Western model than to the experience of some underdeveloped countries. East European privatization proposals represent a broad variety, and we should separate from this the plans put forth by members of the more or less dethroned power elite in an effort to retain some of their privileges. A rapid implementation of privatization would, in fact, also serve to prevent this eventuality. However, in the absence of solvent demand, state enterprises cannot be sold quickly. The author describes two proposals based on the distribution of shares gratis and outlines what he sees as the optimal schedule for privatization.