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111. In Praise and Criticism of Mexico's Pension Reform

Author:
L. Jacobo Rodriguez
Publication Date:
04-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The privatization of Mexico's government-run pay-as-you-go social security system, which went into effect in July 1997, is the Ernesto Zedillo administration's most important structural reform. It is a measure that, if successful, will help bring much-needed social and economic stability. The Mexican peso crisis of 1994–95 underscore d the fragility of Mexico's economy, its need for independent institutions, and its need for a large pool of long-term domestic savings. An increase in the rate of private savings in Mexico, which this reform will promote, would make the Mexican economy less dependent on short-term fluctuations of international capital flows and, thus, more stable. More important still, the privatization of social security will erect one of the basic pillars of a free society by turning Mexico into a country of property-owning workers.
Topic:
Economics, Government, International Political Economy, and Privatization
Political Geography:
Latin America and Mexico

112. Restructuring in the Czech Republic- Beyond Ownership & Bankruptcy

Author:
Gerald A. McDermott and Aydin Hayri
Publication Date:
01-1995
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Restructuring of large industrial holdings in the Czech Republic (S-farms) depends on probes into new markets. The development and financing of probes generates internal holdups and stalemates among the government, banks, and S firms. The government tries to preserve the value of just-privatized S-firms while avoiding subsidies; banks, facing their delinquency, cannot force bankruptcy since keeping them as clients is as important as maintaining capital ade quacy. A compromise arises, 1MBR (intricate monitoring based restructuring), where the outside parties condition their involvement on a peculiar reorganization of the farm. We provide the empirical and theoretical underpinnings of IMBR, the emergence of which is neither deliberate nor accidental. (Keywords; Restructuring, privatization, incom plete contracts, monitoring) ·We use aliases for the names of their companies and their managers to protect their privacy. An earlier version of this paper was presented at the Ford Foundation Conference on CR transition at CERGE-EI. Prague CR. May 1994. '!The research was conducted at CERGE-EI. Prague CR. where Hayri was a visiting professor and McDermott is a visiting re searcher. McDermott's dissertation research was supported by generous grants from the US-CR Fulbright Commission and the Center for European Studies. Harvard University. The authors would like to thank CERGE-EI for its gracious administra tive support and hospitality and the following people for insightful comments and help: Suzanne Berger. Ales Capek. Zhi­yuan Cui. Jeremy Edwards. John Griffin, Miroslav Hrncir. Mike Jetton. Tony Levitas, Richard Locke. Ivana MazaIkova, Gerard Roland. Charles Sabel, David Stark. Frantisek Turnovec, and participants in a seminar at the University of Warwick.
Topic:
Privatization, Industry, Farming, Ownership, Debt Restructuring, and Bankruptcy
Political Geography:
Eastern Europe and Czech Republic

113. Privatization: The Role of Domestic Business

Author:
Ernst Bartell
Publication Date:
06-1993
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
A close examination of the links between privatization programs and domestic business, both in theory and in practice, suggests that the relationships are not nearly so vigorous, uniform, or predictable as conventional promotional arguments imply. It will be argued here that the nature of the relationships between privatization programs and the behavior of domestic business depends upon the goals, methods, and financing of specific national privatization programs as well as on the economic and social characteristics of the private sector in a given country and its macro- and microeconomic policy regime. Privatization programs in themselves are likely to be a secondary and transitory influence on the aggregate behavior of national business with somewhat differing effects and responses within individual sectors of those economies with relatively diverse domestic business communities. As a result, privatization programs are likely to be less important to the incorporation of domestic business into a market-driven development process than other components of economic restructuring and liberalization. These conclusions will be examined briefly in light of the historical record of privatization in Chile, Argentina, Mexico, and Brazil and of interview data with business leaders in Brazil and Chile before and after the installation of their current democratic governments.
Topic:
Development, Privatization, Business, and Economic Growth
Political Geography:
Brazil, Argentina, South America, Central America, Caribbean, Mexico, and Chile

114. Between State & Market: Changing Agriculture in Postcommunist Poland

Author:
Krysztof Gorlach
Publication Date:
01-1993
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The paper deals with the problems of changes in Polish agriculture under current conditions. These conditions include the legacy of the communist period (agrarian structure as well as patterns of activity among farmers), the new pro-market agricultural policy, and the need for privatization of former large state farms. However, the transformation of the largest part of Polish agriculture, that is, about two million relatively small family farms, seems to be the key problem now. The author tries to analyze some stimulants and barriers to the process of change, as well as some options for the future. These options include: the so-called "farmerization path," the "fossilization solution," and the "third way."
Topic:
Agriculture, Markets, Privatization, and Post-Communism
Political Geography:
Europe, Eastern Europe, and Poland