The most likely outcome of the strategy of voucher privatization with investment funds may be a two-sided grab fest by fund managers and enterprise managers-along with drift, stagnation, and decapitalization of the privatized industrial sector.Common wisdom among post-socialist reformers has...

Following the alleged "success" in Czechoslovakia, voucher privatization with investment funds became the form of privatization favored across the transition economies from Mongolia to Slovenia by the "Washington consensus" and by the most prominent and vocal western economic advisors. But the...