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Demystifying Privatization in Developing Countries

Prahlad K. Basu (The Gyosei Institute of Management Studies, Reading, UK)

International Journal of Public Sector Management

ISSN: 0951-3558

Article publication date: 1 June 1994

3463

Abstract

State intervention is needed to dismantle the protective regime of “government failure” and expose the developing economies to the new rigour of global competition and technological advancement. In addition to standing the test of welfare consequences, a developing country′s agenda for privatization includes restructuring, reform, commercialization, management‐cum‐technology contracts for public enterprises and their leasing – prior to divestiture, joint venture, hire purchase and disinvestment of minority, majority or full shareholding through public offer or private sale. The backward and forward linkages, the institutional framework, the pace and sequence, planning and preparation and financing of privatization, with transparency of procedure, are equally important preconditions for avoiding corruption and ensuring efficiency. Divestiture without reform can be counter‐productive. Divestiture without private sector development can remain “stillborn”.

Keywords

Citation

Basu, P.K. (1994), "Demystifying Privatization in Developing Countries", International Journal of Public Sector Management, Vol. 7 No. 3, pp. 44-55. https://doi.org/10.1108/09513559410061740

Publisher

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MCB UP Ltd

Copyright © 1994, MCB UP Limited

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