Public versus private ownership : the current state of the debate

At the heart of the debate about public versus private ownership lie three questions: 1) Does competition matter more than ownership? 2) Are state enterprises more subject to welfare-reducing interventions by government than private firms are? 3) Do state enterprises suffer more from governance problems than private firms do? Even if the answers to these questions favor private ownership, the question must still be asked: Do distortions in the process of privatization mean that privatized firms perform worse than state enterprises? The author's review found greater ambiguity about the merits of privatization and private ownership in the theoretical literature than in the empirical literature. In most cases, empirical research strongly favors private ownership in competitive markets over a state-owned counterfactual (although construction of the counterfactual is itself a problem). Theory's ambiguity about ownership in monopoly markets seems better justified. Since the choice confronting governments is between state ownership and privatization rather than between privatization and optimality, theory has left a gap that empirical work has tried to fill. Further research is needed.Health Economics&Finance,Economic Theory&Research,Environmental Economics&Policies,Access to Markets,Markets and Market Access

The Contribution of Douglass North to New Institutional Economics

Douglass North, along with Ronald Coase and Oliver Williamson, transformed the early intuitions of new institutional economics into powerful conceptual and analytical tools that spawned a robust base of empirical research. NIE arose in response to questions not well explained by standard neoclassical models, such as make or buy and why rich or poor? Today NIE is a success story by many measures: four Nobel laureates in under 20 years, increasing penetration of mainstream journals, and significant impact on major policy debates from anti-trust law to development aid. This paper provides a succinct overview of North's evolving ideas about institutions and explains how North's work shaped the emerging field of new institutional economics and had a potent impact on economics and the social sciences more broadly. North provides a powerful example of how persistent and well placed confidence and hard work can productively transform the status quo. North's influence continues strong and his enthusiasm for exploring new frontiers and cooperating across artificial academic boundaries has never waned.New Institutional Economics, institutions, transaction costs, development and growth

Ownership structure and the temptation to loot : evidence from privatized firms in the Czech Republic

Using a new data set on privatized firms in the Czech Republic, the authors examine how the design of privatization affects outcomes. Earlier studies of privatization in the Czech Republic focused largely on how the broad distribution of shares through vouchers may have motivated the new owners to strip assets from the privatized firms. The authors find evidence for static asset stripping, but also for what Akerlof and Romer (1993) call looting - borrowing heavily with no intent to repay and using the loans for private purposes. This looting occurred because the larger privatized companies had privileged access to credit from state-controlled banks, which had little incentive to enforce debt contracts. The policy implications are significant: financial incentives and regulation are as important as ownership structure in the design of privatization.International Terrorism&Counterterrorism,Private Participation in Infrastructure,Small Scale Enterprise,Microfinance,Economic Theory&Research

Information, incentives, and commitment : an empirical analysis of contracts between government and state enterprises

The authors analyze experience with written performance contracts between developing country governments and the managers of their state-owned enterprises. Such contracts have been a vogue since the mid-1980s, and substantial resources have been sunk into their design and enforcement, yet the few assessments to date show mixed results. Using a simple agency model, they identify how problems of weak incentives sthemming from information asymmetry, lack of government commitment, and lack of managerial commitment can lead to shirking. They apply the model to a sample of 12 contracts with monopoly enterprises in six developing countries (Ghana, India, the Republic of Korea, Mexico, the Philippines, and Senegal). All suffer from serious contracting problems. They find no pattern of improved performance that can be attributed to the contracts. Only three of the 12 case-study companies showed a turnaround in total factor productivity after contracts were introduced, six continued past trends, and three performed substantially worse under contracts than they had before. Labor productivity improved at a faster pace in four cases, and deteriorated in none, but the improvement predated the contract. Performance contracting assumes that government's objectives can be maximized, and performance improved, by setting targets that take into account the constraints placed on managers. For this to occur, the principals must be willing to explicitly state their objectives, assign to them priorities and weights, translate them into performance improvement targets, provide incentives to meet those targets (or monitor the agents without incurring significant costs), and credibly signal their commitment to the contract. These conditions failed to materialize. Why would governments adopt contracts to which they were notcommitted or that were politically unrealistic? Sometimes because it enabled themto get foreign assistance. How explain the managers'lack of commitment? Not surprisingly, managers with information advantages and bargaining power, and with no strong incentives or commitment from the government, used their advantages to manipulate the targets so as to ensure that their performance would be judged satisfactory. The authors outline the conditions under which performance contracts might succeed in improving performance.Environmental Economics&Policies,Labor Policies,Health Economics&Finance,International Terrorism&Counterterrorism,Banks&Banking Reform,Knowledge Economy,Health Economics&Finance,Environmental Economics&Policies,National Governance,Education for the Knowledge Economy

Students' achievement and perceptions of school climate during the transition from single sex education to co-education.

In 1999, a non-government school with a long tradition of 'boys only' education in South Australia introduced co-education at the secondary school level. The following year, girls were admitted at the primary school level. Educational achievement and perceptions of the psychosocial climate of the school's learning environment were measured in all primary and secondary students at the end of this momentous year and again one year later. Questionnaires measuring students' perceptions of the relationship dimensions of cohesiveness, friction and satisfaction and the personal dimensions of competitiveness and difficulty were administered, together with a test of achievement. Interesting differences were found in student achievement and perceptions of the school's climate, over time and across the grade levels

Aspirations, progress and perceptions of boys from a single sex school following the changeover to coeducation.

Career and further education aspirations, educational progress and perceptions of the learning environment were measured annually over three years in primary and secondary boys from a single sex non-government school, following the changeover to coeducation. Hierarchical Linear Modelling analyses revealed the significant role played by the career aspirations of cohorts on boys' progress over time. Further education plans and perceived difficulty of schoolwork were also significant influences, with difficulty at the grade level affecting boys' progress over time. Furthermore, satisfaction with life at school at both cohort and grade levels was a significant determinant of boys' educational progress. These findings suggest new directions for research into single sex/coeducational learning environments. [Author abstract

Boys' goal orientations, self-concept and achievement during the transition from single sex to coeducation

Oxford, U

Telecommunication reform in Ghana

In 1996 Ghana privatized its incumbent telecommunications firm by selling 30 percent of Ghana Telecom to Telekom Malaysia, licensing a second network operator, and allowing multiple mobile firms to enter the market. The reforms yielded mixed results. Landline telephone penetration increased dramatically while the number of mobile subscribers surpassed even this higher level of fixed line subscribers. On the other hand, the network did not reach the levels the government hoped, the second network operator never really got off the ground, and the regulator remained weak and relatively ineffective. The sustainability of competition is unclear. The government ended Telekom Malaysia's management of Ghana Telecom and has invited Norway's Telenor as a strategic partner. What this means in practice remains unclear, and the process for selecting Telenor lacked any transparency. Meanwhile, some of the mobile firms are in precarious financial positions. Competition is still relatively strong, but its sustainability will depend on the government's future commitment to ensuring it.Economic Theory&Research,Public Sector Economics&Finance,Rural Communications,ICT Policy and Strategies,Environmental Economics&Policies

Motherhood

As she lay in the midst of dirt and squalor she seemed in utter oblivion. To her the cobwebby walls, the cockroaches, the plush chair with springs uncovered, and the filthy blanket were unimportant, because for once in her life, the young colored girl had captured the spotlight. She was the center of interest in that room; of secondary interest was the baby - her baby - in the next room

Stepping from single to mixed sex education : boys' progress and perceptions during the restructuring.

In 1999 an independent school in South Australia took the courageous step of introducing coeducation into their single sex boys' school. Mixed sex education was phased in over two years, with girls admitted to Years 7 to 12 in 1999 and Years 3 to 6 in 2000. Progress and perceptions of school climate were measured in all primary and secondary level boys in the school in the inaugural year of coeducation and then annually over the next two years. Hierarchical Linear Modelling analyses revealed an interesting pattern of interrelationships between boys' progress and cohort and grade level group perceptions of satisfaction, cohesiveness and competition within the school. Perceptions of the difficulty of schoolwork were also significantly related to boys' progress during the restructuring period. [Author abstract