Privatization and Capital Market Development: Strategies to Promote Economic Growth

Privatization and Capital Market Development: Strategies to Promote Economic Growth

Privatization and Capital Market Development: Strategies to Promote Economic Growth

Privatization and Capital Market Development: Strategies to Promote Economic Growth

Synopsis

Privatization and capital markets support and reinforce each other to promote economic growth around the world. This work is intended to fill a gap in the literature by discussing the links between privatization and capital markets, and to provide useful insights for policy makers in developing countries and in the international donor agencies, for academics and practitioners dealing with economic development, and for the internationally minded private sector around the world. Privatization, in its various forms, and the development of capital markets will be a primary catalyst for economic growth and development well into the next century.

Excerpt

By the end of the twentieth century, history has proven that there is no alternative to an economy driven by market forces based on fair competition. After the collapse of the Soviet Union, many of the newly independent states (NIS) have chosen to transform their economies from command to market-based ones. Experience is a convincing argument in favor of private property and free markets.

This is why the topic selected by the author of this book -- Privatization and Capital Market Development: Strategies to Promote Economic Growth -- and the comprehensive analysis of the problems of transforming state property into private property (without a revolution) is timely and significant. In this book, the author makes sound recommendations for countries in transition and other emerging market countries. The author is perfectly right when he suggests that governments should shift their portfolio of economic interventions out of areas of the economy in which the private sector could perform better. Mass privatization of state-owned enterprises (SOEs) can play a key role in this shift, along with concurrent development and strengthening of the capital markets. Healthy and liquid capital markets lower the cost of capital for business and therefore enhance economic growth.

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