Abstract
Chapter 4 addresses the relationship between ownership transformation and the establishment of competition. Competition is the driving force of an innovative market economy with private ownership. But privatization — the core of ownership transformation — is a necessary policy to generate a competitive private sector, but it is far from being sufficient. We discuss the problem of the ‘soft’ budget constraint, which prevails in CPEs with state-owned firms and which is a stubborn attendant of transition, when ownership transformation is conducted in a non-competitive way and a non-competitive environment. A taxonomy of privatization presents the various ways in which ownership transformation has been pursued. Finally the difficulties in creating a competitive environment are illustrated with an analysis of anti-trust policy in transition countries.
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© 2006 Hubert Gabrisch and Jens Hölscher
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Gabrisch, H., Hölscher, J. (2006). Privatization and Competition. In: The Successes and Failures of Economic Transition. Palgrave Macmillan, London. https://doi.org/10.1057/9780230626584_5
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DOI: https://doi.org/10.1057/9780230626584_5
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