Large-scale privatization in transition economies

摘要: To explain the slow progress of mass privatization programs in Eastern Europe, authors present a model based on positive spillover between aggregate and individual expected return to privatization, derived from potential populist backlash if costly reforms do not bring forth sufficient privatization. The allows for simultaneous existence pessimistic zero-privatization trap an optimistic full-privatization equilibrium defined by critical While both subsidies minimum-income guarantees can themselves secure coordination equilibrium, financing constraint may offset direct effect. Copyright 1993 American Economic Association.