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Selling Public Enterprise focuses on the pivotal questions of whether the enterprise should be sold, to whom should it be sold, and at what price. It identifies the social value of the enterprise under continued government operation, the social value under private operation, and the private value under private operation as being critical in determining the answers to these questions. In each case "social value" indicates the economic promise of such a venture to both households and firms of the country involved.
The authors take up such topics as shadow pricing, the basic framework of welfare aggregation, the valuation of public income, private income and investment income, base flows and stocks, and the effect of sale prices on public and private values. They discuss the possibility of synergies and strategic behavior and present both a valuation algorithm and a sensitivity analysis. In the concluding chapters they address distributional realities and describe various dimensions of divestiture policy such as lifting constraints on enterprise behavior, improving the net benefit of divestiture, and coping with political constraints.
The authors all teach at Boston University. Leroy Jones and Ingo Vogelsang are Professors of Economics and Pankaj Tandon is Associate Professor of Economics.