Eastern Europe is not well served with straightforward textbook advice. The common wisdom on privatization fails to address the problems created by diffuse ownership and control prior to privatization. Cash auctions may not efficiently match managers and capital stock because of wealth...

This paper proposes a model to shed light on two important policy features of privatization in Central and Eastern Europe: the idea of a necessary critical mass of privatization on the one hand, and the difficulties encountered in the actual privatization process on the other, related to the...

Governments throughout Eastern Europe have been singularly unsuccessful in dealing with large loss-making SOEs. A more promising approach would create an incentive framework and legal environment where the SOE's major non-government creditor can take the lead in initiating restructuring and the...

This paper adresses the issue of the optimal speed of economy-wide restructuring from a state-owned to a privately-owned economy. The analysis is led from a general equilibrium perspective, focusing on the role of endogenously generated capital accumulation. Sensitivity of the optimal speed of...

This paper trys to clarify the political economy arguments underlying the big bang and the gradualist approach to economic transition. The big bang approach emphasizes the importance of windows of opportunity when ex ante political constraints are less binding, whereas gradualist programmes are...