Policy transfer and policy inertia: privatization in Taiwan

In recent years, privatization seems to have been more talked about than carried out in a number of countries. This study looks at the progress of privatization in Taiwan in the light of the literature on policy transfer. Although the government of Taiwan announced a privatization programme in the late 1980s, by the end of 1998 sales of state-owned enterprises had occurred much more slowly than planned. The first part of the article reviews the literature on policy transfer. Policy transfer has been described as the process by which policies transfer from one country to another due to mimetic, normative or coercive effects. Taiwan's privatization programme is then reviewed and the main barriers to change are identified. The study concludes by considering the implications of Taiwan's record on privatization for our understanding of policy transfer in an international context.     

Privatization in Saudi Arabia: Is slow beautiful?

The aim of this article is to abridge the dearth of academic research on Saudi Arabia's privatization strategy, which is touted by government as key to empowering the business community in the largest economy in the Middle East and North Africa region. Whereas some contend privatization has moved at a slow pace and that the business model employed for privatizing public enterprises lacks commercial business efficiency standards, government retorts that, guided by an organized and sequential process, privatization has been successful. This article maintains that if privatization is to confer the benefits claimed for it and sway international investors equipped with modern managerial skills and technical know‐how, authorities need to accelerate privatization and subject enterprises to steadfast market competitive forces. © 2009 Wiley Periodicals, Inc.     

Optimal trade,industrial, and privatization policies in a mixed duopoly with strategic managerial incentives

Abstract

This paper examines optimal trade, industrial, and privatization policies in a home-market model of mixed international duopoly with strategic managerial incentives. Under linear demand and constant marginal costs, the optimal degree of privatization is shown to depend crucially on cost and demand parameters and on the availability of strategic trade and industrial policies. If both firms are equally efficient, optimal trade and industrial policies drive out the foreign firm and the privatization policy loses its effect on national welfare; however, if the home firm is less efficient, then full privatization combined with an import tariff and a production subsidy is optimal for the home country, while an export subsidy is optimal for the foreign country. If trade and industrial policies are unavailable and if both firms are equally efficient, full state-ownership, which drives out the foreign firm, becomes optimal; however, if the home firm is less efficient, only partial privatization is optimal, The state-ownership share is increased if either the market size grows, the home firm's efficiency increases, or the foreign firm's efficiency decreases. Further, the paper demonstrates the potential conflict between privatization and trade liberalization policies.     

The privatization of swarzedz furniture company (SFM): Lessons from Poland's first underwritten public offering

The sale through public offering of Poland's Swarzedz Furniture Company demonstrates that relatively complex privatization transactions can be successfully implemented in economies where capital market institutions have not yet fully emerged. However, the company's performance before and after privatization suggests that a change of ownership is a necessary, but not a sufficient, requirement for effective restructuring of a state-owned enterprise in a formerly socialist economy.     

Assessing privatization investment opportunities in Thailand

Executive Summary Multinational corporations (MNCs) can find lucrative opportunities to invest in emerging‐market countries by participating in the privatization of state‐owned enterprises. The ability of MNCs to form joint ventures or acquire state enterprises in most countries, however, depends on the characteristics of the government's privatiza‐tion policies and plans, the pace of their implementation, and the mechanisms allowed for foreign investment. In order to assess the feasibility of privatization policies in emerging‐market countries, and especially those undergoing dynamic reforms of their economies, MNCs need a framework for analyzing privatization efforts. The appli‐cation of such a framework is illustrated using the experience with privatization and economic reform in Thailand. © 2000 John Wiley & Sons, Inc.     

Privatization in the Czech Republic

Inexorably, privatization is rolling through Central and Eastern Europe, generally following two paths: a slow, deliberate pace or a rapid transformation. Each method has its advantages and advocates. But one nation, the Czech Republic, has taken a modified path that combines both approaches. Sacks examines the Czech privatization process through the government's policy goals, its successes, and the problems it has encountered in its privatization push.     

British privatization: Evaluating the results

The 24 studies reviewed here reveal that nine of the 13 primary objectives of the U.K.'s privatization program have substantially been achieved. Privatization has reduced the size and scope of government, reduced political interference in management decisions, freed government funds so they can be used in sectors of the economy other than state-owned businesses, created a free market economy, promoted domestic investment, benefited the economy through higher returns on capital invested in privatized businesses, generated new sources of tax revenue, broadened domestic equity ownership and promoted equity ownership among employees of privatized businesses. Most of the research reviewed concludes that privatization has reduced the government's budget deficit; provided consumers with improved service, better quality, more choices, new products and lower prices; and improved the efficiency and performance of privatized firms. Finally, most of the studies reviewed report mixed results regarding the privatization program's success at reducing government control of business.     

The value-added of investment bankers in privatizations

Investment bankers are important advisors both to vendors and acquirers in privatization transactions. Their utility is derived from a thorough understanding of the process of privatization and from their objectivity in assessing and valuing an enterprise. While the international profile and large size of most privatizations are seemingly attractive, predictable pitfalls can be expected. Gallo's “ten rules of thumb” provide wise counsel to investment banks currently in or contemplating entry into the market for privatization services.     

Foreign acquisition and post-privatization exit of state-owned firms

This paper analyzes the impact of foreign and domestic ownership on the exit rates of privatized state-owned enterprises (SOEs) in transitional countries. The exit of privatized SOEs can have a profound impact on employment and on the development of local economies of transitional countries. An oligopoly model that incorporates country-level trade costs and individual SOE's productivity is developed to assess the exit of SOEs under either foreign or domestic ownership. The model shows that market competition between firms can lead to liquidation of the SOE by a domestic firm when trade costs increase. When the productivity of SOE is high, neither foreign nor domestic firm will liquidate. The predictions of the model are tested using firm-level privatization data from Central and Eastern Europe. By controlling for productivity, trade costs, and other attributes of SOEs after privatization, it is found that foreign ownership significantly reduces the probability of SOE's exit as compared to domestic ownership. Furthermore, there is evidence that as trade costs increase, the exit probability of domestically owned SOEs increases and the exit probability of foreign-owned SOEs declines.     

The Increased Role of Foreign Capital in the Peruvian Financial System

Summary

Foreign investment has played a very important role in developing Peru's banking sector since 1990. Indeed, as of June 1998, half of all bank assets were foreign-controlled. Much of this increased participation by outside entities can be traced to the privatization drive and to discriminatory reserve requirements on domestic deposits. Despite financial deepening, the analysis conducted here finds that the financial sector has not become more efficient in lowering the cost of intermediation as measured by the interest spread between loans and deposits.     

Determinants,Structure, and Impact of Privatization

Summary

The focus of the paper are determinants of the rate and structure of privatization processes and thus the impact of privatization as exemplified by the case of Poland seen from the comparative perspective. The determinants can be grouped into the main factors, that is those not affecting the privatization processes directly (e.g., macroeconomics issues) and privatization-specific factors (directly affecting the process). The paper tries to dispel some popular and persistent myths concerning the impact of privatization and other transition processes.     

Privatization of health care services in Canada: Reform or regress?

The emergence of the privatization of health care services as one of the dominant health policy issues in many western industrialized countries is no doubt related to a number of factors, including rising health care costs, fiscal crisis in the form of budgetary deficits, charges of public waste and mismanagement and underfunding, the onset of a new era of political and fiscal conservatism, and professional and corporate antipathy to certain aspects of publicly financed health insurance schemes. The paper discusses the meaning of privatization and stresses the importance of recognizing the different forms of privatization and the need to assess these forms against well specified health policy objectives. Current and proposed forms of privatization in Canada are described and evaluated. It is concluded that there are sound arguments against privatization through user fees for insured physician and hospital services. As for the other forms of privatization there are confusing and inconsistent findings that preclude a definitive conclusion as to the wisdom of a general push for privatization. It is stressed that there are not many empirically established facts about the likely effects of privatization and the many claims about the virtues of privatization are far from substantiated by careful research. In the absence of such evidence the push for reprivatization seems, as some critics have pointed out, ideologically motivated.     

Determinants of Poland's Competitive Advantage in the Logistics Sector

Abstract

This paper discusses the transformation within the distribution and logistics sector in Poland. The privatization process and business growth, in conjunction with foreign direct investment, have created a very competitive environment. A modified version of Porter's determinants of the competitive advantage model is used to illustrate changes in this industry. Models are presented depicting business logistics in Poland before and after the transformation. Twelve firms operating in this sector were studied. Problems and opportunities are discussed as they relate to business logistics in Poland. Eventual membership in the European Union will further expand markets, as well as modernize Poland's infrastructure and business logistics systems.     

中国城市水务产业民营化的绩效评价实证研究

本文从总量水平、生产效率、利润和普遍服务水平四个方面构建了中国城市水务产业民营化的绩效评价指标体系,运用1990-2009年的数据检验了民营化对有关指标的影响。检验结果表明,民营化对增加城市水务产业供水总量和利润均有显著影响,但民营化对提高生产效率和普遍服务水平均没有显著影响。从分析结果看,城市水务产业利润增加很可能是由于水价提高造成的,因此政府必须建立有效的价格管制体系。同时,政府在推进民营化的过程中,应出台激励政策引导民营资本进入管网建设领域,以提高普遍服务水平。     

Selling privatization politically

The number of privatization transactions occurring in the world continues to grow apace. Predictions are that over $6 trillion in privatization assets will be sold over the next 20 years.¹ And while the academic debate continues, practitioners continue to garner lessons on how to overcome both technical and political obstacles to implementing privatization transactions. The emerging lessons indicate that it is possible to achieve considerable efficiency and welfare gains from privatization. The real challenges are in finding creative mechanisms for overcoming the political impediments to privatization. The author analyzes the shift in focus from whether efficiency gains are possible with privatization to how to distribute the benefits. Recent innovations to address political constraints are analyzed, such as the greater use of markets to assess the value of firms, the use of giveaways to garner political support, and the array of instruments available to appease nationalistic fears of foreign takeover.     

Cuba's telecommunications market

Two significant steps were taken in 1994 towards putting Cuba on line: the Castro government's partial privatization of its national telecoms enterprise and the lifting of the United States embargo on long distance telecommunications with Cuba. Both have far-reaching implications. Politically they could erode the hardline stance so far taken by both administrations. And the expected modernization of its ancient telecommunications system should make Cuba a more attractive investment target.     

Has the acceleration of privatization become inevitable in Bahrain?

Bahrain remains the most vulnerable Gulf country due to its limited savings and sharp rise in debt levels, leaving it exposed to high financing risks. The financial crisis has been deepened by the economic double blow of the decline in oil prices and the effects resulting from the outbreak of the coronavirus pandemic. Bahrain has decreased subsidies and increased taxes on many products. Those measures seem, however, insufficient to mitigate the negative impacts on the economy. This paper presents a model based on a comparison between fast privatization and gradual privatization strategies undertaken in some Bahraini economic sectors. It shows that the contribution of privatization to economic restructuring is only as effective as the commitment of the government to maintain a high pace of privatization. This condition can provide needed revenues, and can particularly foster private investments and initiatives. Therefore, it may represent an appropriate context to elevate Bahrain out of the present equilibrium characterized by slow privatization and government dominance on the economy.     

Environmental Tax and Public Ownership in Vertically Related Markets

This paper investigates the optimal rate of environmental tax and level of privatization in a vertical relationship between one partially privatized producer and two private sellers. The main results are as follows: First, privatization of the producer firm decreases environmental damage. Second, the optimal environmental tax rate equals the Pigouvian level. Third, fully nationalizing the producer firm is optimal when the government simultaneously decides upon the environmental tax rate; then, privatization decreases social welfare.     

Privatization and Company Restructuring in Eastern Europe

Summary

The successful transition of Eastern European economies from central planning to market orientation has to include significant company restructuring in addition to privatization. At the micro level it can bring enhanced productive efficiency through changes in organizational structure, operations and financial control and the introduction of marketing as a crucial element and function of the restructured companies. At the macro level, company restructuring creates the necessary conditions for improved allocative efficiency, achieved through the transition from the monopolistic market structure of chronic deficit to a mostly competitive one able, in the longer run, to meet market demand. Restructuring is used here in the broader sense of changes in the organization's management orientation, operational processes and systems as well as in its formal structure. Restructuring is held to be both extremely complex and critical to the realization of the benefits of privatization at both macro and micro levels. Some broad hypotheses relating to common elements of the restructuring process arc introduced: a shift to a flatter, less hierarchical organization structure; the adoption of ‘western’ financial management and accounting practices and the introduction of budgetary accountability; the evolution of the marketing function and the rationalization of product ranges in the light of market needs.