Privatization when workers control firms: Mass privatization versus MEBO

Arbeitspapier

In many transition economies, insiders controlled state-owned firms, de facto. For such firms, we model the decision about privatization method, focusing on the choice between free distribution (so called 'mass privatization') and management-employee buyouts. We incorporate a political feasibility constraint that the revenue-maximising government cannot pay insiders to take firms off its hands. Although mass privatization apparently conflicts with revenue maximization, we show that nonetheless it may be the preferred method, and if so it will be complementary with the state continuing to own shares. Mass privatization is more likely to be chosen if the government is politically weak.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: TIGER Working Paper Series ; No. 92

Classification and Topics

• Classification: Wirtschaft ; Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out ; Socialist Systems and Transitional Economies: Planning, Coordination, and Reform
• Subject: Privatization methods ; Transition economies ; Privatisierung ; Übernahme ; Systemtransformation ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bennett, John ; Estrin, Saul ; Maw, James
• Event: Veröffentlichung
• (who): Transformation, Integration and Globalization Economic Research (TIGER)
• (where): Warsaw
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/140744
• Last update: 10.03.2025, 11:44 AM CET