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The Welfare and Political Economy Dimensions of Private versus State Enterprise
Author(s) -
Cook Paul,
Fabella Raul V.
Publication year - 2002
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00294
Subject(s) - economics , subsidy , oligopoly , redistribution (election) , monopoly , public enterprise , valuation (finance) , welfare , politics , market economy , redistribution of income and wealth , microeconomics , public good , finance , public administration , political science , law
We revisit the theoretical debate concerning the merits of privatization by decomposing the welfare effect of transferring an enterprise from public to private ownership. A range of effects is considered including overproduction, subsidy valuation, redistribution, ownership and regulatory effects. The potential gains/losses from privatization are examined by considering the initial conditions facing enterprises under public ownership (whether technically and/or economically efficient) and a range of post‐privatization market structures (whether monopoly, oligopoly or Walrasian).