PRIVATIZATION EXPERIENCES IN SLOVENIA

ABSTRACT*: Slovenia has not avoided disputes over privatization: two major concepts competed. The controversies between them resulted in a compromise, and the Law on the Transformation of Social Ownership encompassed features of both: decentralization and a gradual approach from one, and predominantly distributive privatization by ownership certificates to all citizens from the other. Insiders (workers and managers) retained majority ownership of most privatized companies by bringing their certificates to their 'own' company. Slovenia has thus encouraged a continuation of self-management. Ownership by insiders has advantages over transfer of ownership rights to formally private institutions established by the state. Actual development confirms that a normal macroeconomic framework, hardening of the soft-budget constraint, independence of companies, and managers' loyalty matter more than formal property links.