1- Privatization: Which types

1- Privatization: Which types (modes) ofprivatization were used in transition countries? Choose one mode ofprivatization and explain its positives and negativesfeatures/characteristics.

2- Transition: List and explain threepoints/arguments/questions from Janos Kornai’s article “What theChange of System From Socialism to Capitalism Does and Does NotMean.”


1. Types (modes) of privatization that were used in transitioncountries are restitution, Direct Sales and Equity Offerings,Management-Employee Buyouts and Mass Privatization/voucherprivatization.

Voucher privatization its positives and negativesfeatures/characteristics:   Voucher privatizationbenefits to subdue the deficiency of domestic capital. It helps totackle the alleged inequitableness of other methods and evades thecharges of a sell-out of national assets to foreigners. The snagslinked with valuing enterprises before privatization are alsoevaded. It is a swift, modest way of completing large, economy-wideprivatization plans as needed by the transition.

           But, the foremost risk involved is that a dispersed ownershipstructure will have dearth of focus and power so as to directreal/constructive corporate management, which may frightenprospective new sources of capital.

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