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Privatization in Austria: Some Theoretical Reasons and First Results About the Privatization Proceeds

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  • Ansgar Belke
  • Friedrich Schneider

Abstract

The issues of privatization (and sometimes deregulation) have been reviewed in a large literature on the various aspects of privatization, that has emphasized the potential efficiency gains. Hence, the goal of this paper is twofold: First to provide some theoretical reasoning why privatization is useful as well as profitable for an economy and second to empirically present the extent of privatization in Austria and other European Union countries. Therefore, the reasons why privatization is necessary are elaborated. Then the specific pattern privatization proceeds for Austria relative to other EU and OECD countries is presented. Moreover, some important idiosyncratic extensions for the Austrian case are elaborated. We argue that in the Austrian case, any discussion of privatization cannot be reduced to observing cash flows, the employment performance and the stock-exchange ratings of the privatized formerly stateowned enterprises. Since polito-economic aspects relating to income distribution and ideology play an important role in explaining the way, the extent, the speed and the economic effects of privatization, they have to be considered as well.
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Suggested Citation

  • Ansgar Belke & Friedrich Schneider, 2004. "Privatization in Austria: Some Theoretical Reasons and First Results About the Privatization Proceeds," CESifo Working Paper Series 1123, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1123
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    References listed on IDEAS

    as
    1. Karl Aiginger, 1999. "The Privatisation Experiment in Austria," Austrian Economic Quarterly, WIFO, pages 261-270.
    2. Belke, Ansgar & Fehn, Rainer & Foster, Neil, 2001. "Venture capital investment and labor market performance: a panel data analysis," Discussion Paper Series 50, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    3. Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
    4. Hochreiter, Eduard & Winckler, Georg, 1995. "The advantages of tying Austria's hands: The success of the hard currency strategy," European Journal of Political Economy, Elsevier, vol. 11(1), pages 83-111, March.
    5. Klaus Gugler, 1998. "Corporate Ownership Structure in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 25(3), pages 285-307, January.
    6. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    7. Bartel, Rainer & Schneider, Friedrich, 1991. "The "Mess" of the Public Industrial Production in Austria: A Typical Case of Public Sector Inefficiency?," Public Choice, Springer, vol. 68(1-3), pages 17-40, January.
    8. Venilde Jeronimo & Jose A. Pagan & Gokce Soydemir, 2000. "Privatization and European Economic and Monetary Union," Eastern Economic Journal, Eastern Economic Association, vol. 26(3), pages 321-333, Summer.
    9. Carlin, Wendy & Fries, Steven & Schaffer, Mark E & Seabright, Paul, 2001. "Competition and Enterprise Performance in Transition Economies: Evidence from a Cross-country Survey," CEPR Discussion Papers 2840, C.E.P.R. Discussion Papers.
    10. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-643, December.
    11. Wolfgang Aussenegg, 2000. "Privatization versus Private Sector Initial Public Offerings in Poland," Multinational Finance Journal, Multinational Finance Journal, vol. 4(1-2), pages 69-99, March-Jun.
    12. Jones, Steven L. & Megginson, William L. & Nash, Robert C. & Netter, Jeffry M., 1999. "Share issue privatizations as financial means to political and economic ends," Journal of Financial Economics, Elsevier, vol. 53(2), pages 217-253, August.
    13. Maria K. Boutchkova & William L. Megginson, 2000. "Privatization and the Rise of Global Capital Markets," Financial Management, Financial Management Association, vol. 29(4), Winter.
    14. Jeffrey M. Davis & Thomas J Richardson & Rolando Ossowski & Steven A Barnett, 2000. "Fiscal and Macroeconomic Impact of Privatization," IMF Occasional Papers 194, International Monetary Fund.
    15. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
    16. Bruno Biais & Enrico Perotti, 2002. "Machiavellian Privatization," American Economic Review, American Economic Association, vol. 92(1), pages 240-258, March.
    17. Perotti, Enrico C, 1995. "Credible Privatization," American Economic Review, American Economic Association, vol. 85(4), pages 847-859, September.
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    Cited by:

    1. Belke, Ansgar & Gros, Daniel, 2009. "Is a unified macroeconomic policy necessarily better for a common currency area?," European Journal of Political Economy, Elsevier, pages 98-101.
    2. Kim, Woojin & Weisbach, Michael S., 2008. "Motivations for public equity offers: An international perspective," Journal of Financial Economics, Elsevier, vol. 87(2), pages 281-307, February.
    3. Woojin Kim & Michael Weisbach, 2005. "Do Firms Go Public to Raise Capital?," NBER Working Papers 11197, National Bureau of Economic Research, Inc.
    4. repec:ces:ifodic:v:3:y:2005:i:1:p:14567530 is not listed on IDEAS
    5. Ansgar Belke & Lars Wang, 2005. "The Costs and Benefits of Monetary Integration Reconsidered: How to Measure Economic Openness," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 262/2005, Department of Economics, University of Hohenheim, Germany.
    6. Ansgar Belke & Friedrich Schneider, 2005. "Privatisation in Austria: Response to Internal and External Pressures," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(1), pages 26-32, 04.
    7. Friedrich Schneider & Ansgar Belke, 2004. "Privatization in Austria: Some theoretical reasons and performance measures," Economics working papers 2004-04, Department of Economics, Johannes Kepler University Linz, Austria.

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    Keywords

    Austria; partisan approach; privatization; state-owned enterprises; public choice;

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