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) D...

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Bibliographic Details
Main Authors:	Shirley, Mary, Walsh, Patrick
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ALLOCATIVE EFFICIENCY ASYMMETRIC INFORMATION BANKRUPTCY BARRIERS TO ENTRY BIDDING CENTRAL PLANNING COLLUSION COMMON GOOD COMPETITION POLICY COMPETITIVE EQUILIBRIUM COMPETITIVE MARKETS CONSUMER CHOICE CONSUMER SURPLUS CONSUMERS COST SAVINGS DEMOCRACIES DEVELOPED COUNTRIES DUOPOLY ECONOMIC EFFICIENCY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXTERNALITIES FIXED COSTS HOSTILE TAKEOVER INCENTIVE EFFECTS INCENTIVE SYSTEMS INCOME INCOME INEQUALITY INCREASING RETURNS INCREASING RETURNS TO SCALE INDUSTRIALIZATION INEFFICIENCY INFORMATION ASYMMETRIES MACROECONOMIC POLICY MACROECONOMIC STABILIZATION MANAGERIAL SLACK MARGINAL COST MARKET COMPETITION MARKET FAILURE MARKET FAILURES MARKET LIBERALIZATION MARKET SHARE MARKET STRUCTURE MONOPOLIES MONOPOLY NATURAL MONOPOLIES NATURAL MONOPOLY POLICY RESEARCH POSITIVE EFFECTS PRESENT VALUE PRICE CONTROLS PRICE INCREASES PRICES PRIVATE INFORMATION PRIVATE SECTOR PRODUCERS PRODUCT MARKETS PRODUCT QUALITY PRODUCTION COSTS PRODUCTION EFFICIENCY PRODUCTIVE ASSETS PRODUCTIVITY PROFIT MAXIMIZATION PROPERTY RIGHTS PUBLIC GOODS REGULATORY CAPTURE SALES SCALE ECONOMIES SOCIAL WELFARE SUPPLIERS SURPLUSES TAKEOVER TELECOMMUNICATIONS TRADEOFFS TRANSITION ECONOMIES
Online Access:	http://documents.worldbank.org/curated/en/2000/08/693336/public-versus-private-ownership-current-state-debate http://hdl.handle.net/10986/19806

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Summary:	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.

Public versus Private Ownership : The Current State of the Debate

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