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Theoretical Aspects of the Privatization: Applications to Eastern Europe

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  • Stiglitz, Joseph

Abstract

This paper analyzes the central theoretical aspects of privatization, particularly as they apply to the Eastern European countries. The paper reviews the theoretical and empirical • arguments concerning the desirability of privatization, including those pertaining to the relative efficiency of government ownership. The implications of the Sappington-Stiglitz theorem, identifying conditions under which privatization could achieve all the objectives that, in principle, government ownership could obtain are drawn out. • The second part of the paper discusses several key issues in the design of the privatization programme, including those associated with the recapitalization of industry and the financial institutions, problems of financing the privatization programme, corporate governance, and the auction process.

Suggested Citation

  • Stiglitz, Joseph, 1991. "Theoretical Aspects of the Privatization: Applications to Eastern Europe," Institute for Policy Reform Working Paper Series 294670, Institute for Policy Reform.
    • Handle: RePEc:ags:iprwps:294670
    DOI: 10.22004/ag.econ.294670
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    References listed on IDEAS

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