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Privatization and Reformation *
Author(s) -
KING STEPHEN P.
Publication year - 1995
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1995.tb01868.x
Subject(s) - restructuring , government (linguistics) , revenue , business , value (mathematics) , government revenue , economics , public economics , economic policy , public administration , finance , political science , linguistics , philosophy , machine learning , computer science
This paper presents a simple model of a government contemplating the pre‐sale reform of a public enterprise. While the government is less efficient at such reform than the eventual owner, failure to reform may be considered an indicator of low commercial value by potential purchasers. Consequently, the government may be unable to avoid socially wasteful restructuring if it wishes to maximize its net sales revenue. The results presented in this paper provide a number of insights and policy recommendations for governments embarking on a privatization program.