Schmidt, Klaus M. ![]() |
Full text not available from 'Open Access LMU'.
Abstract
This article develops a model of privatization using an incomplete contracts approach. We argue that different allocations of ownership rights lead to different allocations of inside information about the firm, which in turn affect both allocative and productive efficiency. Privatization is seen as a commitment device of the government to credibly threaten to cut back subsidies if costs are high in order to give managers better cost-saving incentives (a \"harder budget constraint\"). The cost of privatization is that allocative efficiency is distorted.
Item Type: | Journal article |
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Faculties: | Economics Economics > Chairs > Seminar for Economic Theory |
Subjects: | 300 Social sciences > 330 Economics |
Language: | English |
ID Code: | 19773 |
Deposited On: | 15. Apr 2014 08:53 |
Last Modified: | 04. Nov 2020 13:01 |
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