Privatization in the Countries of Eastern and Central Europe and of the Former Soviet Union

In transition economics, privatization seems to have two basic motivations: separation of politics from the economy, and better corporate governance. While different countries have emphasized such motivations to varying degrees, it is clear that none of the privatization methods chosen is indisputably the best. Also, it has proved impossible to plan privatization in the sense that the emerging distribution of property rights has been virtually always different from the one that the authorities seem to have had in mind. Evidence of the comparative productivity impact of different privatization paths is still too fresh to allow for a final assessment. Neither do we know whether the transition economies have been basically locked into their now existing property arrangements or whether efficient markets for property title will lead to a more optimal distribution of such rights.