Publication: Privatization and Restructuring in Central and Eastern Europe
Date
1997-07
ISSN
Published
1997-07
Author(s)
Anderson, Robert E.
Dejankov, Simeon
Pohl, Gerhard
Claessons, Stijn
Abstract
One of the most important policy
questions in the transition economies is what governments
can do to speed the restructuring of firms and thus hasten
the transition to a mature market economy. The authors
report on a study that provides some answers. Privatization
encourages restructuring if it is rapid and comprehensive
and leads to concentrated ownership. Privatization also
promotes restructuring because privatized firms are more
likely than state-owned enterprises to exercise wage
restraint--and wage restraint is vital to free up the
necessary internal finance. But policies that increase bank
lending to firms, such as debt forgiveness and
recapitalization, may do more harm than good. The safest
course is to recapitalize banks only as part of
privatization and to encourage negotiations for financial
restructuring only after the banks are privatized.
Citation
“Anderson, Robert E.; Dejankov, Simeon; Pohl, Gerhard; Claessons, Stijn. 1997. Privatization and Restructuring in Central and Eastern Europe. Viewpoint: Public Policy for the Private Sector; Note No. 123. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/cf859e84-d39f-5c4c-bcc4-7cf44f7a400d License: CC BY 3.0 IGO.”
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