Privatization, Market Liberalization and Learning in Transition Economies
Privatization and market liberalization are widely considered to be complementary reforms in transition economies. This paper challenges this view and closely related "big bang" approach to economic reform. Our analysis suggests that when pursued too vigorously, privatization may actually impede the transition process following market liberalization. Our result is based on an explicit model of market learning, which is a vital component of the economic transition process. Compared to fully-functioning market in a mature market economy, a market in transition is characterized by greater uncertainty regarding market conditions, including free market equilibrium levels of prices and quantities. Market participants must learn about these conditions through their participation in the market process. When the effects of learning are incorporated into analysis, less than full privatization is optimal when the costs of learning are sufficiently important.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||May 1998|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/research/research_papers/department_working_papers.html
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hare, Paul G & Hughes, Gordon & Michael, Thomas & Revesz, Tamas, 1992. "The Competitiveness of Hungarian Industry," CEPR Discussion Papers 736, C.E.P.R. Discussion Papers.
- Mathias Dewatripont, 1992.
"Economic Reform and Dynamic Political Constraints,"
ULB Institutional Repository
2013/175991, ULB -- Universite Libre de Bruxelles.
- Mathias Dewatripont & Gérard Roland, 1995.
"The design of reform packages under uncertainty,"
ULB Institutional Repository
2013/9607, ULB -- Universite Libre de Bruxelles.
- Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
- Bray, Margaret M & Savin, Nathan E, 1986. "Rational Expectations Equilibria, Learning, and Model Specification," Econometrica, Econometric Society, vol. 54(5), pages 1129-60, September.
- Townsend, Robert M, 1978. "Market Anticipations, Rational Expectations, and Bayesian Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 481-94, June.
- Peter Murrell, 1991. "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 59-76, Fall.
When requesting a correction, please mention this item's handle: RePEc:uwo:uwowop:9805. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.