Restructuring and privatization of public enterprises

Abstract

There is agreement among policy-makers, experts, and practitioners that the public enterprise sector has in general not performed according to the expectations which were vested into it. The low efficiency of the public enterprises, their accumulated debts and other adverse effects on the national economy led to the conclusion that the sector needs restructuring and, in general, reduction by divesture and, privatization. As an attempt to enumerate the developmental objectives of privatization the following list is suggested: To individualize ownership; To secure mobility of capital; To introduce Profit Motivation; To mobilize savings of the population; To introduce new projects; Management accountability. The above summary should not be considered as evidence of benefits that privatization brings in each particular case, but rather as a check list against which other possibilities of restructuring in the public enterprise sector could be evaluated.