Privatization in Central and Eastern Europe: Perspectives and Approaches

By Demetrius S. Iatridis; June Gary Hopps | Go to book overview

Chapter 1
A Global Approach to Privatization

DEMETRIUS S. IATRIDIS

Privatization in the global scene is often perceived solely in relation to Central and Eastern Europe (CEE). Contrary to popular opinion, however, this socioeconomic phenomenon appears in many other areas of the world. Whether countries are capitalist or socialist, developed or developing, in the Northern or Southern Hemisphere, privatization is at the epicenter of development. Since privatization has emerged worldwide, its nature and institutional environment can best be understood by broader global views. Broader approaches highlight emerging perspectives on privatization that influence local, national, and regional developments. For example, managers of global corporations are now economically driven by the dictates of worldwide competition, not by allegiance to a specific nation, and work to enhance a corporation's worldwide performance, not any one nation's economic success. As cross-border ownership is booming, globalization takes privatization and enterprises beyond their old borders ( Reich, 1991). Broader approaches also highlight the diverse nature and implications of privatization. For example, privatization in CEE countries mainly involves societal shifts from a planned economy and state monopoly to a market economy and private ownership. In developed capitalist countries, however, it primarily involves the substitution of alternative management structures for public ones whose aim is to improve the delivery of targeted public services (public utilities, corrections, education, social welfare, schools, or health care). Privatization in CEE countries is imperative to balance public and private ownership. So far, however, the methods of mass privatization have not promoted fair and just distributions of income, wealth, and power; a better standard of living; or well-being. Hence, the original strong public support of privatization in CEE has declined sharply because of unfair results, which were unanticipated.

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