One-company towns, characterized by the presence of a large employer in a local labor market, are a frequent legacy of state-led development strategies. How will downsizing or closing unprofitable state-owned enterprises affect these towns? This article develops a simple model combining...

Authorities throughout the developing world are turning to downsizing in an effort to reduce budget deficits and address the inefficiencies engendered by state-led development strategies. Because large-scale involuntary dismissals are often politically difficult, a voluntary approach to...