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Politicians and Firms

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  • Shleifer, Andrei
  • Vishny, Robert

Abstract

We present a model of bargaining between politicians and managers that explains many stylized 'facts about the behavior of state firms, their commercialization, and privatization. Subsidies to public enterprises and bribes from managers to politicians emerge naturally in the model. We use the model and several extensions to understand why commercialization and privatization might work, and what forces contribute to effective restructuring of public enterprises. We illustrate the model using examples from several countries

Suggested Citation

  • Shleifer, Andrei & Vishny, Robert, 1994. "Politicians and Firms," Institute for Policy Reform Working Paper Series 294852, Institute for Policy Reform.
    • Handle: RePEc:ags:iprwps:294852
    DOI: 10.22004/ag.econ.294852
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    References listed on IDEAS

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    1. repec:fth:harver:1512 is not listed on IDEAS
    2. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
    3. Pranab Bardhan & John E. Roemer, 1992. "Market Socialism: A Case for Rejuvenation," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 101-116, Summer.
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    Cited by:

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    2. Berha, Andu & Khemani, Stuti, 2026. "Unreliable Electricity in Developing Countries : The Role of Weak Institutions," Policy Research Working Paper Series 11290, The World Bank.

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