If an enterprise is restructured prior to privatization, underinvestment in restructuring is very likely. This is a special hold-up problem in privatization. Efficient restructuring can be attained if it is performed by either the buyer or a cash-revenue maximizing privatization agency....

This paper deals with efficient organizational choices for the provision of public services. To better apprehend observed contracts of public-private partnerships, we depart from the property -rights literature to distinguish between ownership, rights to make residual decisions, and rights to...

In the context of public-good provision, despite noncontractibility of investments, it is possible to specify who is in charge of tasks such as construction and maintenance. We show that complementarity between the investments of the two tasks favors unbundling of tasks through different...

Corporate actors differ from individuals in that it may be possible to observe the formation of the corporate will from outside, and to influence its formation. This feature can be exploited by regulators. One technique is inducing corporate actors to hire an interface actor, representing the...

Although institutions rooted in the folk theorem can support self-enforcing exchange in a wide variety of contexts, their potential to create cooperation is not limitless. In particular, the folk theorem may break down when some agents are physically stronger than others. I demonstrate this in...

Frey [2001] and others propose subjecting governments to competition within their jurisdiction, but classical liberals argue that having competing law enforcers cannot work. This article describes a hybrid system that relies on markets but has one law enforcement agency per region, with profit...

This paper yields a rationale for why subsidized public banks may increase regional welfare in a financially integrated economy. We present a model with credit rationing and heterogeneous regions in which public banks prevent a capital drain from poorer to richer regions by subsidizing local...

We identify the ultimate ownership structures of the 20 largest firms in 12 transition countries in 1996, and the subsequent patterns of ownership change over 1996-2008. Of the state-controlled companies in 1996 more than half are still in state hands in 2008. Better quality of governmental...

Telecommunications, airlines, and postal services have similar economic features. However, they have followed different privatization patterns. While privatization of the universal service provider (USP) is common in telecommunications and airlines, it is by far less frequent in the postal...

When nonprofit organizations in the U.S. engage in activities that are "substantially related" to their legal mission they pay no profits taxation, but profit from "unrelated business" (UB) activities is taxed. Since UB activity has no apparent justification other than to generate revenue, we...