Wednesday, December 7th, 2016 8:53 am

Privatization in Central and Eastern Europe

On the whole, the shift from state to private ownership of many industrial assets in central and eastern European countries after communism has increased productivity in those countries.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel
Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Agree 6
For many but not all industries, privatization increases efficiency. I think this is true in many central and eastern European countries.
Bio/Vote History
         
Antras Pol Antras Harvard Strongly Agree 9
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Agree 5
Bio/Vote History
         
Besley Timothy J. Besley LSE Did Not Answer
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Strongly Agree 10
This is a no brainer.
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 10
Bio/Vote History
         
Blundell Richard William Blundell University College London Agree 9
The majority of privatisations have been carried out effectively with proper auctions and subsequent price regulation.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Agree 8
Only after several years of depression.
Bio/Vote History
         
Carletti Elena Carletti Bocconi Agree 7
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Strongly Agree 2
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Agree 8
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Strongly Agree 9
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Strongly Agree 7
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra No Opinion
As a non-expert I cannot answer that is related to oligarchies, corruption and the end of the cold war.
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Strongly Agree 8
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 6
Bio/Vote History
         
Garicano Luis Garicano LSE Strongly Agree 9
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Strongly Agree 10
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Strongly Agree 9
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Strongly Agree 10
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Strongly Agree 1
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Did Not Answer
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Strongly Agree 9
The answer would be less obvious if applied only to Western Europe
Bio/Vote History
         
Kleven Henrik Kleven Princeton Agree 5
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Agree 8
While productivity has increased almost surely, production may actually have dropped significantly, as industry was largely dismantled.
Bio/Vote History
         
Krusell Per Krusell Stockholm University No Opinion
I have no knowledge in this area.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Strongly Agree 10
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Agree 3
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Strongly Agree 8
During transition in those economies, we also saw productivity gains for state-owned firms but gains for privatized firms were much larger.
-see background information here
Bio/Vote History
         
Meghir Costas Meghir Yale Agree 7
Bio/Vote History
         
Neary Peter Neary Oxford Agree 7
Productivity has increased, though in Russia and other countries the distributional consequences have been regressive
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Agree 6
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Strongly Agree 8
This is not only in line with what economic theory predicts, but also consistent with much evidence.
-see background information here
-see background information here
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Strongly Agree 10
Bio/Vote History
         
Persson Torsten Persson Stockholm University Strongly Agree 8
Even in East Germany only a few firms were viable at world-market prices at the end of communism (Akerlof et al, BPEA, 1990)
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Strongly Agree 8
governments are not good at running businesses, private owners know better how to increase productivity
Bio/Vote History
         
Portes Richard Portes London Business School Strongly Agree 10
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 8
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Uncertain 3
Bio/Vote History
         
Repullo Rafael Repullo CEMFI No Opinion
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 6
Bio/Vote History
         
Schoar Antoinette Schoar MIT Strongly Agree 9
Bio/Vote History
         
Van Reenen John Van Reenen MIT Agree 7
Bio/Vote History
         
Vickers John Vickers Oxford Strongly Agree 7
Gains have come from pro-market reforms more generally, but privatization was a pre-condition.
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Strongly Agree 9
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Agree 6
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Agree 4
Agree but moving from state-sponsored monopolies to badly-regulated private sector monopolies does not do much for the average consumer.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Strongly Agree 9
With rare exceptions, firms were highly inefficient beforehand. In some countries, private firms remain uncompetitive because of corruption.
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Strongly Agree 9
Bio/Vote History
         

About the European IGM Economic Experts Panel

This panel explores the views of European economists on vital public policy issues. It does this by polling them on important policy questions, by including a way for them to explain their answers briefly if they wish, and by disseminating these responses directly to the public in a simple format.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the main areas of economics, to be geographically diverse, and to include older and younger scholars. As with the IGM’s US panel, the experts are all outstanding researchers in their fields. The panel includes recipients of top national and international prizes in economics, fellows of the Econometric society and the European Economic Association, members of distinguished national and international policymaking bodies in Europe, recipients of significant grants for economic research, highly accomplished affiliates and program directors of the Centre for Economic Policy Research and the National Bureau of Economic Research, and past and current editors of leading academic journals in the profession. This approach not only provides a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters in Europe and beyond.

Questions for the European IGM Economic Experts Panel are emailed individually to all members of the panel. They are phrased as statements with which one can agree or disagree. The experts are also asked how confident they are in their knowledge of the issue associated with the question (10 being highest). Each panelist responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering. They may also include brief comments with their responses, or provide links to relevant sources.

It is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist knows a lot about a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's knowledge that he or she does not feel well placed to judge. In this case, our panelists vote "no opinion".

Panelists suggest many of the questions themselves. Members of the public are also welcome to suggest questions (see link below). Although IGM faculty members are responsible for deciding the final version of each question, we send a draft of the question to the panel in advance and invite them to point out problems with the wording if they see any. This process helps us to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and will be analyzed for an article to appear in a peer-reviewed journal.

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