On the perils of categorizing responses

Abstract

Privatization has proved to be less easy to carry out and less magical in its accomplishments than seems earlier to have been believed. Disappointment has been engendered by the slow pace of privatization, the accompanying reduction in jobs, the wealth accumulated by those who are successful at the task, and the apparently long delays before its benefits emerge. Perhaps most disturbing is the propensity of even well-intentioned public servants to sabotage the process. What government should and should not do if privatization is to have a chance of fulfilling its earlier promise is discussed. The venerable market economies such as the UK, New Zealand, and France are examined, and 6 very different problems in the economies in transition from central to market control are presented. The 6 problems that occur are: 1. valuation of the assets, 2. obsolete and deteriorated plant, 3. unavailability of domestic purchasing power, 4. viable procedures for giveaway of assets, 5. arrangements for oversight of management, and 6. vested managerial interests.