The Treuhandanstalt: Privatization by State and Market

Carlin, Wendy and Mayer, Colin (1994) The Treuhandanstalt: Privatization by State and Market. In: Froot, Kenneth, Sachs, Jeffrey and Blanchard, Olivier, (eds.) The Transition in Eastern Europe: Restructuring. National Bureau of Economic Research Project Report, 2 . University of Chicago Press, Chicago, pp. 189-214. ISBN 978-0226056623

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To date, most of Eastern Europe has pursued privatization through markets: auctions, vouchers, mutual funds, and stock market flotations have all been widely advocated. The state has been viewed as an impediment whose involvement in the enterprise sector needs to be terminated at the earliest opportunity. There is one exception. Despite having an unusual abundance of managerial and financial resources, responsibility for restructuring East German enterprises has fallen on a state agency, the Treuhandanstalt (THA). This paper is an exploration of the way in which the THA has undertaken its function and of the lessons, if any, that it provides for the rest of Eastern Europe. We are not concerned here with the process of German unification and the course of events that rendered the vast majority of East German industry unprofitable (see, for example, Akerlof et al. 1991; Sinn and Sinn 1991; Dornbusch and Wolf, chap. 5 in vol. 1). This paper focuses on how the THA has engaged in restructuring and privatization in a situation in which the majority of tradable-sector jobs were under immediate threat.

Item Type: Book Section
Keywords: Domestic marketing; Consumer affairs; Privatization; Resources; finance
Subject(s): Finance
Date Deposited: 27 Mar 2012 20:25
Last Modified: 20 Sep 2018 10:38
Funders: N/A

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