A comparative review of privatisation strategies in four former socialist countries

Abstract

THIS ARTICLE PRESENTS an international comparison of privatisation strategies in those former socialist countries that have so far done the most in this field, namely Hungary, Poland, the Czech and Slovak Federation and the former East Germany. The experience in these countries is presented in the same way. The first part gives an analysis of the objectives of privatisation as well as the main characteristics of the privatisation programme. Here, the answers to the following questions are sought: (1) Have the individual countries opted for a decentralised approach, allowing initiatives also from enterprises and other interested parties, or for a centralised approach, where the initiative lies in the hands of state agencies? (2) Have they decided on a diversified approach, with a large number of different privatisation methods, or is privatisation rather concentrated in a few methods only? (3) Is there a programme of mass privatisation including free distribution of state assets? (4) How important is the role of denationalisation? The second part examines legal bases for privatisation and describes the functioning of institutions responsible for its implementation. The third part describes the most frequently used methods of privatisation. The fourth part contains a brief evaluation of what has been accomplished so far and a forecast of what may happen in this area in individual countries in the future. The survey of the four countries is followed by some concluding thoughts on current general trends in privatisation in former socialist countries.