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Introduction
Gérard Roland
Privatization of large state- owned enterprises (SOEs) has been one of the
most radical new policies of the last quarter century. While many coun-
tries engaged in large nationalization programs during the de cades fol-
lowing World War II, Margaret Thatcher initiated a policy swing in the
other direction in the 1980s by pushing for aggressive privatization of
many of the large state- owned British fi rms. In the following two de cades,
privatization policies were implemented throughout the planet by left- and
right- leaning governments alike. Right- wing governments engaged in
privatization in an effort to keep down the size of government, while left-
wing governments implemented privatization policies in order to gener-
ate revenues and also because they were persuaded of the virtues of
markets and competition after being disappointed with the ineffi ciencies
of large state- owned fi rope rms. In this way, privatization spread from Eu
to Latin America, Asia, and Africa, reaching a high point with the transi-
tion from socialism to capitalism following the fall of the Berlin wall.
Transition economies were then faced with the task of privatizing their
whole economies. In these cases, quite diverse policies were put in place,
ranging from a gradual sale of state property to foreign and domestic in-
vestors (as was the case in Hungary and Poland) to more radical “mass
privatization programs” that resulted in the rapid giveaway of state- owned
assets.
Privatization policies generated huge controversies. In many countries,
they were criticized for their regressive redistribution effects. State own-
ership in many countries was used as a tool of redistribution that made it
possible to provide cheap water, energy, or transportation for poorer seg-
ments of the population. Privatization has thus been associated with cut-
backs in redistribution and has stirred pop u lar discontent in many
