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| Author: | Bennedsen, M. |
| Title: | Political ownership |
| Journal: | Journal of Public Economics
2000 : JUN, VOL. 76:3, p. 559-581 |
| Index terms: | Resource allocation Politics Privatization Public companies Economic theory Equilibrium analysis Models Eastern Europe Russia |
| Freeterms: | Ownership |
| Language: | eng |
| Abstract: | 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 btw. unions and private owners within the firm and btw. these organized insiders and disorganized taxpayers. How insiders' lobby activities distort resource allocation in the state-owned enterprise is investigated. It is then shown that efficiency in labour allocation is improved when cash flow is transferred to private owners. Finally, how transferring control rights affects efficiency and resource allocation when there are restrictions on side payments between the interest groups is analyzed. |
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