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Political Ownership

  • Bennedsen, Morten

    (Department of Economics, Copenhagen Business School)

Registered author(s):

    Political involvement in the operation of an enterprise, whether it is private or state owned, creates opportunities for interest groups to influence the allocation of resources. Resource allocation transfers rent both between unions and private owners within the firm and between these organized insiders and the disorganized taxpayers. I investigate how insiders`lobby activities distorts resource allocation in a state owned enterprise. Then I show that efficiency in labor allocation is improved when cash flow is rights affects efficiency in resource allocation when there are restrictions on side payments between the interest groups.

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    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/7563
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    Paper provided by Copenhagen Business School, Department of Economics in its series Working Papers with number 11-1999.

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    Length: 32 pages
    Date of creation: 18 Jul 1999
    Date of revision:
    Handle: RePEc:hhs:cbsnow:1999_011
    Contact details of provider: Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
    Phone: 38 15 25 75
    Fax: 38 15 34 99
    Web page: http://www.cbs.dk/departments/econ/
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    1. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-69, August.
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    8. Blanchard, O. & Aghion, P., 1996. "On insider privatization," European Economic Review, Elsevier, vol. 40(3-5), pages 759-766, April.
    9. Roman Frydman & Andrzej Rapaczynski, 1993. "Insiders and the state: overview of responses to agency problems in East European privatizations," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 1(1), pages 39-59, 01.
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    12. Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
    13. Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
    14. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 265-86, April.
    15. E. Markou & C. Waddams Price, 1999. "UK utilities: Past reform and current proposals," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 70(3), pages 371-416, 09.
    16. Persson, Torsten, 1998. "Economic Policy and Special Interest Politics," Economic Journal, Royal Economic Society, vol. 108(447), pages 310-27, March.
    17. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, June.
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