Abstract
The book is a collection of papers read at a conference on privatization . sponsored by the U.S. Agency for International Development (USAID) held in Washington D.C. in February 1986. It brings a tremendous amount of knowledge and expertise related to privatization and is a useful manual on how to privatize for a country embarking on privatization. It is divided into six parts. Pan I of the book presents an overview of privatization, and its rationale in the developed countries (DCs) and the less developed countries (LDCs). Contributors to this part of the book include Steve H. Hanka, L. Gray Cowan and M. Peter McPherson.
In Pan II Elliot Berg's chapter on the role of divestiture in economic growth is interesting for the light it sheds on the differences in motivation to privatization, its modalities and the economic environment in the LDCs and the Des. It states that the major motivation to divestiture in the DCs is search for dynamic management, while in the LDCs the major preoccupation is with reducing the fiscal and the monetary burden. The second difference has to do with the modalities. In the DCs the process involves locating the right merchant banker, getting the assets valued and putting up the company for sale in a developed capital market environment. While in the LDCs the process is one of finding buyers in an environment where the capital markets are thin with few potential buyers. The third difference has to do with the economic policy environment, where there is a well structured legal system, a more or less competitive environment without excessive controls and a relatively open international trading system in the DCs. While the constraints in the LDCs are related with labour laws, regulations and protectionism. And finally, domestic political constituency for privatization is very small in the LDCs. The mast import= message that penneates from this chapter for policy markers in the LDCs is, that blindly following the privatization policies evolved in the DCs is not the answer, as problems in the former are different from (hose of the latter. Other contributors to Part II include Robert Poole's enumeration of the political obstacles to privatization, necessity of property rights by Steve H. Hanke and politicization of privatization by Manuel Tanoira.
S. Akbar Zaidi. (1989) BOOK REVIEWS: Privatization and Development, (International Centre for Economic Growth, California, 1987), Pakistan Journal of Applied Economics, Volume-08, Issue-1.
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