The Results of 'Mass Privatization' in Romania: A First Empirical Study
SITE Working Paper No. 122
Posted: 14 Nov 1997
Date Written: October 1997
This paper provides a first assessment of the contribution of the Mass Privatization Program (MPP) to privatization in Romania. Despite the potential importance of the 1995-96 program, which offered shares in nearly 5000 companies to citizens in exchange for coupons, little information has been made available to the public on its outcomes. Analyzing a comprehensive database of companies in the MPP, we find that an average of only 18.7 percent of the shares of the companies were actually transferred to Romanian citizens, and only 7.8 percent of the companies in the program were majority privatized (on a size-weighted basis). We estimate that the so-called "mass privatization" accounted for only about 5.5 percent of the state-owned enterprise assets in the country, despite the enormous hype about the program from the previous government. We place our findings in the context of the history of Romanian privatization policies since 1990, we provide some comparisons with mass privatization programs in other countries, and we analyze the implications of the MPP for the corporate governance and restructuring of enterprises.
JEL Classification: O5
Suggested Citation: Suggested Citation