This paper assesses policies of mass privatization in Germany, Czechoslovakia, Hungary and Poland. A central concern stemming from the analysis is that, in view of the fiscal crisis facing economies in transition, it is crucial for governments to try to maximize the proceeds from the sale of state assets. Because of the low initial level of private wealth, it is important, in this respect, to let potential buyers borrow from the government or issue claims on future revenues (obtained with the privatized assets) to the government in order to pay for the privatized firms. Allowing for such non-cash bids removes the government's incentive to delay privatization for fiscal reasons, reduces its ability to squander immediately the proceeds from privatization and improves the decentralization of control by allowing less wealthy but more able bidders to buy the firms they are best suited to run.
Bolton, Patrick, and Gerard Roland. "Privatization in Central and Eastern Europe." Economic Policy 15 (October 1992): 275-303.
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