The serious implications of privatizing state-owned enterprises for politicians, managers, and investors make such decisions highly contingent on firm characteristics and past performance, complicating the identification of the privatization effects. A unique opportunity for this identification...

Performance contracts (PCs) - contracts signed between the government and state enterprise managers - have been used widely in developing countries. China's experience with such contracts was one of the largest experiments with contracting in the public sector, affecting hundreds of thousands of...