An efficient privatization mechanism

Anbarci, Nejat and Karaaslan, Mehmet E. 1998, An efficient privatization mechanism, Journal of economic policy reform, vol. 2, no. 1, pp. 73-87.

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Title An efficient privatization mechanism
Author(s) Anbarci, Nejat
Karaaslan, Mehmet E.
Journal name Journal of economic policy reform
Volume number 2
Issue number 1
Start page 73
End page 87
Total pages 15 p.
Publisher Routledge
Place of publication Abingdon, England
Publication date 1998-02
ISSN 1748-7870
Summary We consider the privatization of State-Owned Enterprises (SOEs) of which markets can be opened to competition once privatization takes place and competitors can compete successfully against them in a few years. The currently used "Revenue Maximization (RM)" scheme maximizes the government revenue from privatization but does not provide incentives for the privatized SOE to charge a price lower than the monopoly price until competition arises. We propose the "Welfare Maximization (WMY scheme, which induces the privatized SOE to charge a competitive price without resorting to regulation. Also, WM provides greater incentives for post-privatization cost reduction.
Language eng
Field of Research 160505 Economic Development Policy
140213 Public Economics- Public Choice
Socio Economic Objective 970116 Expanding Knowledge through Studies of Human Society
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©1998,Taylor & Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024640

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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