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[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] Re: Privatization in Russia
Members of the discussion group may be interested in the following paper Regards Shann "The Effect of Privatization on Wealth Distribution in Russia" Economics of Transition, Vol. 7, No. 2, 1999 BY: MICHAEL ALEXEEV Indiana University Contact: MICHAEL ALEXEEV Email: Mailto:malexeev@indiana.edu Postal: Indiana University Wylie Hall 105 Bloomington, IN 47405-6620 USA ABSTRACT: The paper considers the Russian privatization process and examines how its deviation from the competitive sale standard was likely to affect wealth inequality. (Privatization here is defined narrowly as the transfer of existing assets from government ownership to private hands.) While empirical evaluation is all but impossible due to the dearth of reliable data, it is feasible to analyze the institutional features of Russian privatization in terms of their effect on redistribution of wealth. The paper argues that the most relevant and interesting issue is to evaluate privatization's distributional consequences relative to the informal pre-reform property rights. In light of this, privatization is modelled as a rent-seeking contest with incumbency advantage of enterprise managers who initially held the greatest informal rights over assets. The rent-seeking contest is shown to strongly magnify this pre-reform wealth inequality reflected in the incumbency advantage. In addition, the paper analyzes the distributional consequences for various wealth groups of the differences in the composition of their pre-reform informal wealth, most importantly a relatively large share of housing assets in the wealth of the poor. The effect of wealth redistribution on economic growth in Russia is also discussed. JEL Classification: D7, P2, P3 At 03:31 AM 24/11/1999 , you wrote: >Russian PM says no going back on privatisation > >MOSCOW, Nov 22 (Reuters) - Russia's privatisation process, widely criticised >for putting some of the country's best assets in the hands of a few >well-connected insiders, cannot be reversed, Prime Minister Vladimir Putin >said on Monday. > >"There can be no question of deprivatisation or redistribution of property," >RIA news agency quoted Putin as telling a conference on state property >management. > >But the 47-year-old premier said that in certain situations there could be "a >civilised change of ownership." > >Putin was speaking against a background of several bitter disputes over >ownership of former state enterprises and ahead of a December 19 >parliamentary election in which some candidates have questioned the legality >of past sell-offs. > >Former Prime Minister Yevgeny Primakov, a leader of the centrist >Fatherland-All Russia movement, separately said on Monday that privatisation >of certain enterprises should be reviewed, but without turning back the clock >to the Soviet past. > >"If a privatised enterprise is worth it, if its resources are being stolen by >new owners, the workers being driven out... and it is discovered that >privatisation was not carried out correctly, if it was illegal, then we will >review it retrospectively," Interfax agency quoted Primakov as saying. > >Russia's mass privatisation programme in the early to mid-1990s dismantled >the centralised Soviet economy and led to the sale of tens of thousands of >state enterprises. > >But some of the biggest firms, including oil and metals producers, were sold >cheaply in so-called shares-for-loans deals to a small group of bankers and >businessmen. > >Other privatisations have also been criticised for being carried out too >hastily without netting the budget its due. > >Putin said "individual approaches" should be used to resolve disputes such as >those which erupted recently at the Vyborg pulp and paper mill and at the >Lomonosov porcelain factory. > >Workers at the Vyborg mill have locked out the plant's British owners despite >attempts by bailiffs to enforce their rights, while an appeal is pending on a >court ruling that the 1993 privatisation of the Lomonosov factory was >illegal. >-- >Dan Bell >International Program Coordinator >Ohio Employee Ownership Center >Kent State University >Kent, OH 44242 >(330) 672-3028 >(330) 672-4063 fax >dbell@kent.edu >http://www.kent.edu/oeoc/ Shann Turnbull
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