Competition and privatization amidst weak institutions: evidence from Mongolia |
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| Authors: | JH Anderson Y Lee P Murrell |
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| Institution: | The World Bank, Washington, DC 20433, USA Phone: 1 202 458 5961 Fax: 1 202 522 2751 E-mail:;Korea Development Institute, PO Box 113, Chongnyang, South Korea Phone: 82 2 958 4071 Fax: 82 2 958 4090 E-mail:;Department of Economics and IRIS Center, University of Maryland, College Park, Md. 20742, USA Phone: 1 301 405 3476 Fax: 1 301 405 3542 E-mail: |
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| Abstract: | Mongolia's mass privatization program was implanted in a country that lacked the very basic institutions of capitalism. This paper examines the effects of competition and ownership on the efficiency of the newly privatized enterprises, using a representative sample of enterprises and controlling for possible selection biases. Competition has quantitatively large effects; perfectly competitive firms having nearly double the efficiency of monopolies. Enterprises with residual state ownership appear to be more efficient than other enterprises, reflecting an environment where the government was pressured to focus on efficiency and institutions gave little voice to outsider owners. |
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