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Does Sequencing of Privatization Matter in Reforming Planned Economies?

Author

Listed:
  • Aasim M. Husain

    (International Monetary Fund)

  • Ratna Sahay

    (International Monetary Fund)

Abstract

Although key to the reform process in Central and Eastern Europe, large-scale privatization cannot be undertaken all at once. This paper analyzes the allocative efficiency implications of alternate sequences of privatization in a reforming planned economy with two sectors--an input-producing upstream sector and a final goods-producing downstream sector. The model focuses on the link, through an intermediate inputs market, between the two sectors. The impacts of exogenous shocks are highlighted to show how the inflexibility of public firms in responding to shocks constrains the production response of private firms operating in perfectly and imperfectly competitive markets.

Suggested Citation

  • Aasim M. Husain & Ratna Sahay, 1992. "Does Sequencing of Privatization Matter in Reforming Planned Economies?," IMF Staff Papers, Palgrave Macmillan, vol. 39(4), pages 801-824, December.
    • Handle: RePEc:pal:imfstp:v:39:y:1992:i:4:p:801-824
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    Citations

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    Cited by:

    1. Kar, Saibal & Majumdar, Devleena, 2015. "The wage response in exporting firms: evidence from machinery and chemical industries in India," MPRA Paper 103483, University Library of Munich, Germany.
    2. Gianni De Fraja & Barbara M. Roberts, 2009. "Privatization in Poland What was the government trying to achieve?1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(3), pages 531-557, July.
    3. Mr. S. Nuri Erbas, 2002. "Primeron Reforms in a Second-Best Ambiguous Environment: A Case for Gradualism," IMF Working Papers 2002/050, International Monetary Fund.
    4. Funke, Norbert, 1993. "Timing and sequencing of reforms: Competing views," Kiel Working Papers 552, Kiel Institute for the World Economy (IfW Kiel).
    5. Singh, Nirvikar, 2010. "The Dynamics and Status of India’s Economic Reforms," MPRA Paper 24479, University Library of Munich, Germany.
    6. Jacek Cukrowski, 2002. "Privatizing a service sector: where to start?," Prague Economic Papers, Prague University of Economics and Business, vol. 2002(3), pages 269-279.
    7. Csaba, László, 1995. "A nemzetközi pénzügyi szervezetek és a keleteurópai rendszerátalakító politika [International financial organizations and the East European policies aimed at systemic transformation]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 117-138.
    8. Yongfu Liang & Leonard F. S. Wang & Yapo Yang, 2023. "What role should public firms play in the upstream market?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(1), pages 101-117, March.

    More about this item

    JEL classification:

    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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