Optimal Privatization Design and Financial Markets

Stefano Bosi (University of Evry Paris-Saclay) & Guillaume Girmens & Michel Guillard (University of Evry Paris-Saclay)

 

This paper provides a simple general equilibrium analysis of privatization, exploring its real effects. They derive from the expansion of risk-sharing opportunities (within an incomplete markets setting) that are created by the addition of a market in the public project property rights. The principal conclusion is that an optimal combination of voucher and share issue privatization can implement the first-best.

 

Published in

Journal of Public Economic Theory, 2005


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