This paper presents empirical work grounded in the soft budget-constraint literature. A loan is soft when a bank cannot commit the enterprise to hold to a fixed initial budget and/or the timing of repayment. Using data collected by the EBRD (BEEPS 2002) in 26 transition economies, we analyze the...

In a framework similar to the models of expectation on economic policy, we purpose a model where the government subsidizes firms privatized by massive giveaways to the managers who are empire- builders. The government injects funds because its aim is to avoid a drastic fall of output when a...

Using a sample of 25 economies in transition from 1990 to 2001, this paper deals with the evolution of output and its relation to the different large-scale privatization policies applied by the countries. Ceteris paribus, we econometrically show that the choice of a privatization policy can lock...