소장기록
제목Liberalization Before Privatization : A Corporate Governance Perspective on Market Institutions and Ownership Regimes
설명This paper looks at the economic, rather than ideological, justification for state-owned enterprise(SOE) reform, focusing on the problems of asymmetric information and incomplete contracts. When incentive schemes and objectives are examined separately under public vs. private provision, it seems clear that the case for privatization comes from the objective side, rather than the incentive side. Through corporatization and listing of shares on the stock market, SOEs can adopt much of market-based sanctions and incentives. What they cannot easily imitate is private firms' focus on the objective of profit maximization. While voters-taxpayers want SOEs to correct for market failures and promote social welfare, politicians and bureaucrats may use SOEs to pursue their private objectives by transferring public resources to their supporters or even engaging in outright corruption. Privatization can serve as a means of removing these potentially distortionary objectives if it can be implemented. For privatization to prove effective, however, it must be a part of a comprehensive package involving the participation of at least some large shareholders who have enough stake in the firm to monitor management as well as concomitant improvements in market institutions. After all, market-based sanctions and incentives lose much of their effectiveness under diffuse ownership, overprotected management, soft budget constraints, and limited competition. Market liberalization thus must be accorded priority if privatization is to lead to increased efficiency. It must also be noted that private provision could be inferior to public provision in some cases, especially when opportunities for "cutting corners" are significant.
생산자임원혁
날짜1999-11-01
기록유형문서류
기록형태보고서/논문
주제정치경제
연관링크http://www.kdi.re.kr/research/subjects_view.jsp?pub_no=981
식별번호KC-R-00509
제목Liberalization Before Privatization : A Corporate Governance Perspective on Market Institutions and Ownership Regimes
설명This paper looks at the economic, rather than ideological, justification for state-owned enterprise(SOE) reform, focusing on the problems of asymmetric information and incomplete contracts. When incentive schemes and objectives are examined separately under public vs. private provision, it seems clear that the case for privatization comes from the objective side, rather than the incentive side. Through corporatization and listing of shares on the stock market, SOEs can adopt much of market-based sanctions and incentives. What they cannot easily imitate is private firms' focus on the objective of profit maximization. While voters-taxpayers want SOEs to correct for market failures and promote social welfare, politicians and bureaucrats may use SOEs to pursue their private objectives by transferring public resources to their supporters or even engaging in outright corruption. Privatization can serve as a means of removing these potentially distortionary objectives if it can be implemented. For privatization to prove effective, however, it must be a part of a comprehensive package involving the participation of at least some large shareholders who have enough stake in the firm to monitor management as well as concomitant improvements in market institutions. After all, market-based sanctions and incentives lose much of their effectiveness under diffuse ownership, overprotected management, soft budget constraints, and limited competition. Market liberalization thus must be accorded priority if privatization is to lead to increased efficiency. It must also be noted that private provision could be inferior to public provision in some cases, especially when opportunities for "cutting corners" are significant.
생산자임원혁
날짜1999-11-01
크기 및 분량29쪽
언어영어
출처한국개발연구원
연관링크http://www.kdi.re.kr/research/subjects_view.jsp?pub_no=981
기록유형문서류
기록형태보고서/논문
대주제정치경제
소주제산업
자원유형기록
파일 df4b6ecbdeb42348bf812bf200f1a9d6.pdf
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