National competition policy is having a major effect on Australian industry. The Hilmer committee recommendations on infrastructure access, competitive neutrality, restructuring of public enterprises and legislative review have been accepted by all Australian governments. The underlying economic...

This paper presents a simple model of a government contemplating the presale reform of a public enterprise. While the government is less efficient at such reform than the eventual owner, failure to reform may be considered an indicator of low commercial value by potential purchasers....