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| Author: | Blanchard, O. Aghion, P. |
| Title: | On insider privatization |
| Journal: | European Economic Review
1996 : APR, VOL. 40:3-5, p. 759-766 |
| Index terms: | PRIVATIZATION EUROPE, EAST STRUCTURAL CHANGE |
| Language: | eng |
| Abstract: | In many Eastern European countries, privatization is proceeding slowly. That is mainly because of the insiders, who have control but no property rights to the firms at the moment. The insiders oppose outsider privatization. Should the goverments decide to choose the insider privatization route, the privatization would proceed faster. There seems to be two efficiency arguments for choosing the insider privatization path: First, insider path aligns control and property rights. Second, in case insiders cannot do the job themselves, they will have the right incentives to sell the firms to those outsiders who can. The paper focuses on the second argument, concluding that it is not as obvious as it seems to be. |
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