Yksityistämisen hyvinvointivaikutukset siirtymätalousmaissa

Only abstract. Paper copies of master’s theses are listed in the Helka database (http://www.helsinki.fi/helka). Electronic copies of master’s theses are either available as open access or only on thesis terminals in the Helsinki University Library.Vain tiivistelmä. Sidottujen gradujen saatavuuden voit tarkistaa Helka-tietokannasta (http://www.helsinki.fi/helka). Digitaaliset gradut voivat olla luettavissa avoimesti verkossa tai rajoitetusti kirjaston opinnäytekioskeilla.Endast sammandrag. Inbundna avhandlingar kan sökas i Helka-databasen (http://www.helsinki.fi/helka). Elektroniska kopior av avhandlingar finns antingen öppet på nätet eller endast tillgängliga i bibliotekets avhandlingsterminaler.This thesis provides an analysis of the welfare impact of privatisation in former command economies. The main idea is to examine the impact of inequality first of all on aggregate welfare and secondly on restructuring decisions and growth. In the first part of the paper different utility functions of enterprise managers and owners are analysed in a model with given ownership structures. The conclusion is that an increase in unemployment during enterprise restructuring leads to a trade-off between efficiency and inequality. Privatisation policies that maximise productivity gains of individual enterprises do not necessarily lead to a maximisation of aggregate welfare. The second part of this paper provides a special form of a typical transition economics model that analyses the interactions between unemployment and the decisions of enterprises in transitional economies. Instead of constant average production in state and private firms an AK growth model is used, in which inequality leads to a decrease in investments and growth. The impact of inequality on the equilibrium rates of restructuring and unemployment depend on whether restructuring is exogenous or endogenous. If the speed of restructuring - in other words the speed in which state- owned enterprises shed labour - is given, inequality leads to a larger equilibrium unemployment. However, in the empirically more realistic case the speed of restructuring is affected by the decisions made by enterprise workers. As in the first model the employees face a trade-off between an increase in wages in the private sector and safe employment in the public sector. The conclusion with endogenous restructuring is that inequality is a major obstacle for restructuring. Economies with large inequality end up with slower restructuring speed and smaller unemployment in their equilibrium transition path. This paper also gives empirical evidence for the arguments in the case with endogenous restructuring. A sample of eighteen transitional economies shows that countries with relatively low income inequality have proceeded faster in enterprise reforms. Also, these countries have relatively high unemployment rates compared to countries with higher inequality.Tässä lisensiaattitutkielmassa arvioidaan yksityistämisen hyvinvoimtivaikutuksia entisissä suunnitelmatalousmaissa. Pääasiallisena tarkoituksena on analysoida epätasaisen tulonjaon vaikutuksia ensinnäkin talouden kokonaishyvinvointiin ja toiseksi kasvuun sekä päätöksiin yritysten uudelleenjärjestelystä. Tutkielman ensimmäisessä osassa tutkitaan yrityksen omistajien ja managereiden hyötyfunktioita mallissa, jossa omistusrakenteet ovat eksogeenisia eli annettuja. Ensimmäisen mallin johtopäätös on, että työttömyyden kasvu yritysreformien aikana johtaa tilanteeseen, jossa yrityksen tuottavuus ja tasainen tulonjako ovat vaihtoehtoisia tavoitteita. Yksityistämispolitiikka, joka maksimoi yksittäisten yritysten tuottavuutta ei välttämättä johda parhaaseen mahdolliseen hyvinvointiin koko kansantalouden kannalta. Tutkielman toisessa osassa esitellään siirtymätalousteorialle tyypillinen malli, jossa analysoidaan työttömyyden ja yritysten päätöksenteon välistä vuorovaikutusta. Malli poikkeaa tähän asti esitetyistä teorioista siten, että yrityksen vakioisen keskimääräisen tuottavuuden sijaan käytetään AK-kasvumallia, jossa tulonjakoerot johtavat investointien ja siten kasvun pienenemiseen. Tulonjakoerojen vaikutus uudelleenjärjestelyn asteen ja työttömyyden tasapainoon riippuu siitä, ovatko uudelleenjärjestelypäätökset eksogeenisia vai endogeenisia. Jos uudelleenjärjestelyn aste - eli se miten nopeasti valtion omistamat yritykset irtisanovat työvoimaansa - on annettu, suuremmat tulonjakoerot johtavat suurempaan tasapainotyöttömyyteen. Käytännössä kuitenkin yrityksen työntekijät vaikuttavat päätöksiin uudelleenjärjestelystä. Aivan kuten tutkielman ensimäisessä osassa työntekijöillä on vaihtoehtona joko palkkojen kasvu yksityisellä sektorilla tai varma työllistyminen julkisella sektorilla. Uudelleenjärjestelyn ollessa endogeenista johtopäätös on, että tulonjakoerot ovat merkittävä este yrityksen päätöksille uudelleenjärjestelystä. Sellaisissa talouksissa, joissa tulonjakoerot ovat suuret, on pienempi tasapainotyöttömyys ja niiden yritysreformit ovat hitaampia siirtymävaiheen aikana. Tutkielmassa esitetään myös empiirisiä todisteita johtopäätöksistä endogeenisen uudelleenjärjestelyn tapauksessa. Kahdeksantoista siirtymätalousmaan otoksesta voidaan todeta, että maat, joissa on pienemmät tulonjakoerot ovat edenneet nopeammin yritysten uudistamisessa. Näissä maissa on myös työttömyysaste ollut suhteessa korkeampi kuin maissa, joissa on suuremmat tulonjakoerot

The Distribution of Assets in Transitional Economies

An equal distribution of assets is a crucial element in the process of economic transition from plan to market. In the socialist era most physical assets were owned by the state and private ownership was not very important for most individuals. When the state abandons the socialist system and privatizes most of the formerly state-owned property, it also gives up the provision of secure employment, low-priced housing and the subsidies to industry, agriculture and private consumption. The relevance of private ownership grows, but how fast it does and in which way the new 'culture' of property rights is created, depends widely on the initial conditions and on the different privatization approaches. Although privatizing state-owned assets involves a transfer of huge amounts of public property into the hands of private persons, this process may lead to an increase in poverty and inequality.Empirical research on asset distribution in transitional economies has been limited, mainly because of the inaccuracy of statistical data in this area. Still, the increase in poverty and income inequality during the transition period seems to suggest an increase in asset concentration. This research analyzes the changes in asset distribution by comparing the performance of different transitional economies in terms of their initial conditions and different privatization programs, and draws some conclusions from the point of view of the distribution of assets. While this gives some information on how privatization can affect the distribution of physical capital over the short term, the long term effects are also briefly discussed at the end of this paper, where it is emphasized, that secondary markets for privatized assets can change radically the distribution of assets generated by the initial measure in the field of privatization

Privatization, Asset Distribution and Equity in Transitional Economies

The economies in transition are experiencing unique changes in the distribution of assets. The growth in the share of private ownership is occurring through the privatization of state-owned assets and through the birth of private firms. The changes in the property rights regime are exceptionally complicated in transitional economies. In the period of central planning the state not only possessed practically all assets, but also provided secure employment, low-priced housing and subsidies for industry. As the socialist system is replaced by private ownership and a much reduced role for the state, a completely new system of property rights must evolve, in addition to the changes in legal ownership. When a country is experiencing this kind of institutional change, it is obvious that the resulting distribution of wealth might sharply deteriorate, and the whole transition process could lose its social acceptability. Income inequality and poverty have increased in all transitional economies during the past decade. A part of the growing income inequality has been induced by greater asset concentration, which has a special significance in transitional economies, in which the share of capital and entrepreneurial income is rising. The inequality problem has been particularly crucial in the early transition years, because privatization and the secondary markets of privatized assets have triggered a redistribution of assets at prices well below market value. The scope for concentrated asset distribution is evident. In this paper we examine the changes in the distribution of assets during economic transition. We compare the initial conditions, privatization methods, the secondary markets of privatized assets and the birth of the enterprise sector in different transitional economies of Eastern Europe and East Asia. The main task is to analyse the way in which different policies and conditions affect the equity of asset distribution and the degree to which various countries have succeeded in avoiding the concentration of assets into the hands of a small privileged class and in encouraging the creation of an efficient and more egalitarian private sector. Finally, we outline several paths for the changes in ownership structure that have emerged in these countries

Reconciling Micro and Macro Data on Household Wealth: A Test Based on Three Euro Area Countries

The report on the Measurement of Economic Performance and Social Progress by Stiglitz, Sen and Fitoussi concludes that, in the measurement of household welfare, all material components should be covered, i.e. consumption, income and wealth, from both the micro as well as the macro perspective. Additionally, several other initiatives like the G20 finance ministers’ and central bank governors’ data gap initiative have emphasised having an integrated micro-macro framework where consumption, income and wealth can be analysed. Current researchers linking macro and micro information for the households have focused so far on income and consumption as these are the areas where most data sources are available. The purpose of this article is to extend the focus to household wealth using both household survey data and national financial accounts. The article also aims to create a first set of macroeconomic accounts that include wealth broken down by household groups

Long-Term Growth and Welfare in Transitional Economies The Impact of Demographic, Investment and Social Policy Changes

This paper analyses the long-term growth and welfare impact of the transition to the market economy in the countries of Eastern Europe. We define welfare as the average real net wage after payments of social security contributions to fund a paygo-type pension system, and of taxes to service the interests on the accumulated public debt.We examine four sets of factors that will influence growth and the welfare of wage earners up to the year 2030. First, we argue that the accumulation of physical capital will be affected by a sharp initial fall in the capital stock, by a medium-term decline in savings and investments, and by efficiency gains following marketisation. Second, the human capital stock is expected to experience a similar short-term erosion because of the recent upsurge in human capital flights and the current decline in the quality and quantity of education being provided. Third, we also argue that the transition's population crisis, which has entailed large upswings in mortality and sharp drops in fertility, will affect negatively labour supply and dependency ratios, particularly over 1995-2020. Finally, we examine changes in pension policy and their negative inter- and intra-generational welfare effects. In the absence of policy changes, future generations will have to bear the consequences of growing government expenditure in the form of higher current pension transfers and of future debt-servicing costs.The overall impact of these factors is simulated by means of a mini-model which calculates changes in potential output, gross average wage, pension bill and welfare over 1990-2030. The simulation results indicate that the long-term growth of potential output will remain modest until 2020 because of the slow accumulation of both physical and human capital, and the stagnation of labour supply. The situation will be especially critical in Russia, where output is not expected to reach its pre-transition level by 2030. Second, welfare is expected to grow at an even slower rate. In the worst cases, it will increase at below one per cent a year, after a very large fall over 1990-95. The model shows that even some increase in the saving rate would not affect growth significantly. The large and negative long-term impact of demographic changes on net wages can only be alleviated by decreasing the pension and tax burden on future generations. An increase in the retirement age, an early recovery in fertility rates, and a faster preservation/accumulation of production factors, will be decisive for the improvement of welfare in the medium and long term