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|Authors|Methodology|MainFindings|
|---|---|---|
|Sheshinski,Eytan andLuisFelipe<br>Lopez-Calva.<br>1999.<br>'Pnvatizabon<br>and<br>itsBenefits:<br>Theory<br>and<br>Evidence.'<br>_Development_<br>_DiscussionPaper698._Cambridge,<br>MA:Harvard<br>Insttute<br>for<br>Intemabonal Development.<br>htto:llwww.hiid.harvard.edu/oroiectl<br>.compa<br>httc://www.hild.harvard.edu/froect<br>caer/oapers/paper35.Ddf|The<br>paper reviews<br>themicro<br>and<br>macroeconomic effectsof privatzabon<br>basedonasurveyoftheempirical<br>literature.<br>red|The evidence showsthatpnvatizedfirms improve<br>their profitabilityafterthesale,evencontrolling for<br>macroeconomicandindustry specificfactors. This<br>result<br>holds<br>for<br>different<br>market<br>structures.<br>Deregulabonpolicies speeduptheconvergence<br>processoffirmsto industrystandards.<br>Partial<br>pnvatizationhasalowereffectonprofitabilitywhen<br>withfullprivatzabon.<br>Microeconomic<br>evidence confirmsthattheintroductionofcompebtion<br>enhances<br>productvity<br>gains.<br>Firms<br>in<br>more<br>concentratedand regulatedmarkets, thoughthey<br>alsogothroughanimportantrestructuring afterthe<br>sale,<br>showlowerincreasesin<br>productivityas<br>comparedtothosethatareundermarketdiscipline.<br>Eliminatingrestrictionstoforeigndirectinvestment<br>andtradebarriers, and govemmentcontrolson<br>prcesandquantbesfuelsthecatch-upoffirmsto<br>competbive standards.<br>Thebudgetdeficitshowsa<br>posibvetrend,i.e.,itdeciinesduringthereform<br>period.|
|Shirley,Mary,andPatrickWalsh.<br>2000.'Publicvs.PrivateOwnership:<br>TheCurrentState of theDebate."<br>_WorHd_<br>_Bank_<br>_Policy_<br>_Research_<br>_WorkingPaper2420._Washington,<br>D.C.:<br>World<br>Bank.<br>htto://econ.worldbank.ora/files/1175<br>wDs2420.odf|Thepaperreviews thedebateoverstate<br>ownershipbysearchingtheoretcaland<br>empiricalstudiesforanswersto the<br>followingquestions: (i)Doescompetibon<br>mattermorethanownership?<br>(ii)Are<br>SOEsmoresubjecttowelfarereducing<br>interventonsbygovemmentthanprivate<br>firms?<br>(iii)DoSOEs suffermorefrom<br>corporate govemanceproblemsthan<br>privatefirms?|Theoreticalstudiesareambiguousabouttheeffects<br>ofownership. Empiricalliterature, however,suggests<br>thatwhilemarketstructurehasapositiveimpacton<br>performance,thisimpactfailstodominatethe<br>ownership<br>effect.Thearguments<br>thatmarket-<br>structuredominatesrestsoncasesinwhichpublic<br>and<br>private<br>firms<br>in<br>compebtiiveenvironments<br>performequallywell,andthesecases arerare.Both<br>thetheoretcalandempiricalliteratureare ambiguous<br>abouttheeffectsofownershipinmonopolymarkets.<br>Theories<br>that<br>assume<br>a<br>welfare<br>maximizing<br>govemmentsuggest thatSOEscancorrectmarket<br>failures,butpublicchoicetheoriesareskeptcalof<br>these<br>type<br>govemment<br>models.<br>Corporate<br>govemance<br>theories<br>suggest<br>that<br>even<br>well<br>intenbonedgovemmentsmaynotbeabletoassure<br>thatSOEmanagers do theirbidding.Theempirical<br>literature favorsthelatter viewofSOEs.Instudiesof<br>industrialized countries,wherewemight expectmore<br>developedpolitcalmarketstomotivategreater<br>govemment concemwithwelfaremaximizationor<br>betterinformabon<br>and<br>incenfivestoovercome<br>corporategovemanceproblems,privatefirmsstill<br>have<br>an<br>advantage.<br>Theoretical<br>critiques<br>of<br>privatzabon suggestthatdistortedobjectves,market<br>failuresandpoorinstitutbonswilllead tocostly<br>failures.<br>Someofthesestudiessufferfromthe<br>absenceofarealisticSOEcounterfactualorare<br>extrapolatingfromafew,prominentcases,suchas<br>Russia.The21empiricalstudiescitedinthispaper<br>suggestthat mostfirmsdo betterandallfirmsat<br>leastaswellafterprivabzabon.Noneofthestudies<br>find thatperformance wouldbebetterhadtheynot<br>been privatized.|

# B. Developing Countries

Bemal, Richard L., and Wihsome J. This study analyzes privatization Overall, privatizabon has had positive effects in the Leslie. 1999. 'Privatzation in the inibatives in the English-speaking Caribbean. English-Speaking Caribbean: An Caribbean. It examines the various Assessment'" _CSIS Policy Papers_ modalities which countries have ublized There have been net gains in tems of employment on _the Amencas._ X(7). for private sector involvement in the Inibal divestment of agricultural lands in Jamaica, for state sector and examines the impact on example, resulted in employment increases of 150 http hwcsIs.ora/americas/oubs/o employment economic efficiency, and percent As a result, the trade unions have been pPrivAssessmentDdf **Ith -m*1,NWy nf** **_n,c-, -I_** generally supportive of the govemments efforts.