1- Privatization: Which types (modes) of privatization were used in transition countries? Choose one mode of...

1- Privatization: Which types (modes) of privatization were used in transition countries? Choose one mode of privatization and explain its positives and negatives features/characteristics.

2- Transition: List and explain three points/arguments/questions from Janos Kornai’s article “What the Change of System From Socialism to Capitalism Does and Does Not Mean.”

Expert Solution

1. Types (modes) of privatization that were used in transition countries are restitution, Direct Sales and Equity Offerings, Management-Employee Buyouts and Mass Privatization/voucher privatization.

Voucher privatization its positives and negatives features/characteristics: Voucher privatization benefits to subdue the deficiency of domestic capital. It helps to tackle the alleged inequitableness of other methods and evades the charges of a sell-out of national assets to foreigners. The snags linked with valuing enterprises before privatization are also evaded. It is a swift, modest way of completing large, economy-wide privatization plans as needed by the transition.

But, the foremost risk involved is that a dispersed ownership structure will have dearth of focus and power so as to direct real/constructive corporate management, which may frighten prospective new sources of capital.

Rahul Sunny answered 2 years ago

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