Privatization Matters


Book Description

To investigate the impact of bank privatization in transition countries, we take the largest banks in six relatively advanced countries, namely, Bulgaria, the Czech Republic, Croatia, Hungary, Poland and Romania. Income and balance sheet characteristics are compared across four bank ownership types. Efficiency measures are computed from stochastic frontiers and used in ownership and privatization regressions having dummy variables for bank type. Our empirical results support the hypotheses that foreign-owned banks are most efficient and government-owned banks are least efficient. In addition, the importance of attracting a strategic foreign owner in the privatization process is confirmed. However, counter to the conjecture that foreign banks cream skim, we find that domestic banks have a local advantage in pursuing fee-for-service business. Finally, we show that both the method and the timing of privatization matter to efficiency; specifically, voucher privatization does not lead to increased efficiency and early-privatized banks are more efficient than later-privatized banks even though we find no evidence of a selection effect.




Privatization of Water Services in the United States


Book Description

In the quest to reduce costs and improve the efficiency of water and wastewater services, many communities in the United States are exploring the potential advantages of privatization of those services. Unlike other utility services, local governments have generally assumed responsibility for providing water services. Privatization of such services can include the outright sale of system assets, or various forms of public-private partnershipsâ€"from the simple provision of supplies and services, to private design construction and operation of treatment plants and distribution systems. Many factors are contributing to the growing interest in the privatization of water services. Higher operating costs, more stringent federal water quality and waste effluent standards, greater customer demands for quality and reliability, and an aging water delivery and wastewater collection and treatment infrastructure are all challenging municipalities that may be short of funds or technical capabilities. For municipalities with limited capacities to meet these challenges, privatization can be a viable alternative. Privatization of Water Services evaluates the fiscal and policy implications of privatization, scenarios in which privatization works best, and the efficiencies that may be gained by contracting with private water utilities.




Does Sequencing of Privatization Matter in Reforming Planned Economies?


Book Description

Although a centerpiece of the reform process in Central and Eastern Europe, large-scale privatization cannot be undertaken all at once and policymakers inevitably face the choice of privatizing some sectors before others. This paper analyzes the allocative efficiency implications of alternate sequences of privatization in a reforming planned economy with two sectors—an input-producing upstream sector and a final goods-producing downstream sector. The model focuses on the link, through a market for intermediate inputs, between the two sectors. The impact of exogenous shocks to the two sectors are highlighted to show how the inflexibility of public firms in responding to shocks constrains the production response of private firms operating in perfectly as well as imperfectly competitive markets.




Privatization of Water Services in the United States


Book Description

In the quest to reduce costs and improve the efficiency of water and wastewater services, many communities in the United States are exploring the potential advantages of privatization of those services. Unlike other utility services, local governments have generally assumed responsibility for providing water services. Privatization of such services can include the outright sale of system assets, or various forms of public-private partnershipsâ€"from the simple provision of supplies and services, to private design construction and operation of treatment plants and distribution systems. Many factors are contributing to the growing interest in the privatization of water services. Higher operating costs, more stringent federal water quality and waste effluent standards, greater customer demands for quality and reliability, and an aging water delivery and wastewater collection and treatment infrastructure are all challenging municipalities that may be short of funds or technical capabilities. For municipalities with limited capacities to meet these challenges, privatization can be a viable alternative. Privatization of Water Services evaluates the fiscal and policy implications of privatization, scenarios in which privatization works best, and the efficiencies that may be gained by contracting with private water utilities.




Privatization Matters


Book Description

To investigate the impact of bank privatization in transition countries, we take the largest banks in six relatively advanced countries, namely, Bulgaria, the Czech Republic, Croatia, Hungary, Poland and Romania. Income and balance sheet characteristics are compared across four bank ownership types. Efficiency measures are computed from stochastic frontiers and used in ownership and privatization regressions having dummy variables for bank type. Our empirical results support the hypotheses that foreign-owned banks are most efficient and government-owned banks are least efficient. In addition, the importance of attracting a strategic foreign owner in the privatization process is confirmed. However, counter to the conjecture that foreign banks cream skim, we find that domestic banks have a local advantage in pursuing fee-for-service business. Finally, we show that both the method and the timing of privatization matter to efficiency; specifically, voucher privatization does not lead to increased efficiency and early-privatized banks are more efficient than later-privatized banks even though we find no evidence of a selection effect. Published in: 'Privatization Matters: Bank Performance in Transition Countries,' Journal of Banking and Finance, (29), August-September 2005, pp. 2153-78.




Time to Rethink Privatization in Transition Economies?


Book Description

IFC Discussion Paper No. 38.QUOTEIt is now universally acknowledged that ownership matters; that private ownership in and of itself is a major determinant of good performance in firms... Decent economic policy and well-functioning legal and administrative institutions... matter greatly as well.QUOTEThis paper looks at what happens when the shift to private ownership gets far out in front of the effort to build the institutional underpinnings of a capitalist economy. The emphasis is on what went wrong and why and what, if anything, can be done to be correct it. Proposals include renationalization and/or postponement of further privatization, both to be accompanied by measures to strengthen the managerial capacities of the state. Neither approach seems likely to produce short-term improvements. The regrettable fact is that governments that botch privatization are equally likely to botch the management of state-owned firms. In a number of Central European transition countries, privatization is living up to expectations; and there is no need for such measures. For institutionally-weak countries, the less dramatic but reasonable short-term course of action is to push ahead more slowly with case- by-case and tender privatization in cooperation with the international assistance community in hopes of producing some success stories that will lead by example.




Lessons from Privatization


Book Description

This book assesses the labor market consequences of privatization in developing countries (the Republic of Korea, India and Mexico) and transition economies (Bulgaria, the Czech Republic, Eastern Germany and Hungary) during the first half of the 1990s. Based on over 20 case studies in seven countries, it considers the effect of privatization on productivity and on the level and structure of employment. The evolving patterns of industrial relations in privatized firms and the subsequent changes in wages, remuneration systems and non-wage benefits are also examined.




Local Government Innovation


Book Description

Nationally recognized scholars and practitioners examine opportunities in which services traditionally provided by local governments are offered by the private sector though a contract or are transferred to a private business completely. Many large U.S. cities have contracted services for many years. With the movement to rightsize governments in recent years there has been renewed interest by local governments in similar ventures. Privatization, in its many forms, is now seen as a viable alternative to traditional ways of providing public services and can bring substantial benefits to residents. With greater accountability being demanded and pressures on local officials to hold the line on or reduce taxes, efforts to find innovative service delivery methods will probably increase. Cities, such as Atlanta, Indianapolis, and Charlotte, are examples showing that contracts with private businesses can work to benefit all parties. Local officials must move ahead cautiously, and not all attempts at privatization or contracting have succeeded. Some cities, after an evaluation, have decided to provide services with municipal employees. The main issues underlying privatization decisions will be addressed conceptually so that practitioners and academics benefit from a review of the current thinking on the issues. At the same time, exemplary practices and case studies are included so that readers can understand how privatization and managed competition have been implemented in local governments. Special attention is paid to administrative questions that may arise during the implementation process. For example, ways in which cities have worked with employees who fear displacement because of the privatization process are described. The book breaks new ground by including references to recent innovations in public-private partnerships and describing how privatization may evolve in the future.




The Privatization of Human Services


Book Description

No reader of professional journals, agency reports, or the daily press needs to be told that Professors Gibelman and Demone have assembled a vol ume of contributions to a very lively debate. The two words highlighted, "privatization" and "contracting," sum up the prescriptions of many for social service reform and the anxieties of others who question the new strategies. The pace and scale of developments over the past 2 decades sometimes allows us to forget that the subject has a long history. Privatization may be thought of as involving public turnover to the private sector of responsi bility for services it has been delivering. Or it may be the public sector arranging for the private sector to take on new services that the public wishes to encourage or for which it accepts responsibility. The transaction usually involves public funds. The historical story, however, is not one of public temporal primacy.




The Privatization of Education


Book Description

Education privatization is a global phenomenon that has crystallized in countries with very different cultural, political, and economic backgrounds. In this book, the authors examine how privatization policies are being adopted and why so many countries are engaging in this type of education reform. The authors explore the contexts, key personnel, and policy initiatives that explain the worldwide advance of the private sector in education, and identify six different paths toward education privatization—as a drastic state sector reform (e.g., Chile, the U.K.), as an incremental reform (e.g., the U.S.A.), in social-democratic welfare states, as historical public-private partnerships (e.g., Netherlands, Spain), as de facto privatization in low-income countries, and privatization via disaster. Book Features: The first comprehensive, in-depth investigation of the political economy of education privatization at a global scale.An analysis of the different strategies, discourses, and agents that have contributed to advancing (and resisting) education privatization trends. An examination of the role of private corporations, policy entrepreneurs, philanthropic organizations, think-tanks, and teacher unions. “Rich in examples, careful in its analysis, important in its conclusions and recommendations for further work, this book is a vital, rigorous, up-to-date resource for education policy researchers.” —Stephen J. Ball, University College London “Few issues are as significant as is education privatization across the globe; few treatments of this issue offer both the breadth and nuanced understanding that this book does.” —Christopher Lubienski, Indiana University