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On the dynamics of privatization

Author

Listed:
  • Heng-fu Zou

    (Public Economics Division, Policy Research Department, The World Bank
    Institute of Advanced Economic Studies, Wuhan University)

Abstract

In this paper, we answer two questions about how privatization should proceed. First, we assume an exogenously given time span of privatization and study how the rate of privatization is related to the initial total state capital, the adjustment cost of privatization, the efficiency difference between the private sector and the state sector. the income discount rate and the exogenous terminal time fur privatization. Second, from the perspective of income maximization and adjustment cost minimization, we endogenize the choice of the time span of privatization and offer a solution to the optimal terminal time for the completion of the privatization process.

Suggested Citation

  • Heng-fu Zou, 1995. "On the dynamics of privatization," CEMA Working Papers 92, China Economics and Management Academy, Central University of Finance and Economics.
    • Handle: RePEc:cuf:wpaper:92
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    References listed on IDEAS

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    1. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    2. Sachs, Jeffrey D, 1992. "Privatization in Russia: Some Lessons from Eastern Europe," American Economic Review, American Economic Association, vol. 82(2), pages 43-48, May.
    3. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    4. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
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    2. Go, Delfin S., 1994. "Revenue uncertainty and the choice of tax instrument during the transition in Eastern Europe," Policy Research Working Paper Series 1330, The World Bank.
    3. Danyang Xie & Heng-fu Zou, 2025. "The Optimal Timing of Institutional Reform in a Dynamic Optimization Framework," CEMA Working Papers 792, China Economics and Management Academy, Central University of Finance and Economics.
    4. Kun Jiang & Susheng Wang, 2016. "Staged Privatization: Transforming State-Owned Enterprises into Market-Based Firms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(4), pages 694-726, December.

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    More about this item

    JEL classification:

    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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