Theory of Privatization in Eastern Europe: Literature Review

Abstract

This paper discusses the most important theoretical contributions to the literature on privatization, focusing on emerging economies, and gives a summary on recent research concerning the ways privatization might affect the development of securities markets. In addition, the paper provides a number of policy implications, emphasizing the trade-off between privatization and the reduction in social welfare and the possibility that the privatization process itself may have conflicting objectives (creation of incentive mechanisms, fairness, fast privatization).Privatization, Emerging economies, Social welfare