Article

 

The political economy of privatisation in Azerbaijan

by

Lâle Wiesner, Nottingham Trent University

JEL classification : P200, O520

Abstract

Privatization has been widely regarded as a “panacea” for the prevailing economic crisis in previously centrally planned economies (PCPE’S). Based on the alleged superiority of private ownership, the literature on privatization has largely ignored the definition of property rights and their formation. The question raised in this article is, why it is that the existing set of property rights cannot easily be replaced with one that is more conductive to economic recovery. The answer lies in the institutional changes that are necessary and which, in turn, lead to complex processes of contracting for property rights. These institutional requirements are discussed in the context of Azerbaijan and it is argued that the deficiencies of the institutional framework in this and other PCPE’S have not been adequately taken into account either in the privatization literature or in the privatization process itself. As a result, the process of contracting for property rights has not led to the establishment of appropriate enterprise control mechanism or the initiation of major industrial restructuring.

 

 

The economics of bankruptcy and the transition to a market economy

by

Istvan Abel, Budapest University of Economics and CEPR

Konstantine Gatsios, Athens University of Economics and Business and CEPR

JEL classification : G330, P510

Abstract

The paper deals with simple decision rules in bankruptcy procedures. It describes special issues of enterprise liquidation and reorganization during economic transformation in Eastern European countries. In these countries, the consequences of stringent bankruptcy regulations, exercised within a weak market environment characterized by underdeveloped capital markets, may force firms into liquidation even though reorganization may be a more efficient option both for them and for the economy as a whole.

 

 

Organizational changes and human resource management in post-soviet industrial enterprises (1990 - 1995)

by

Leonidas E. Maroudas, University of Aegean

JEL classification : J530, P310

Abstract

Following the dismantling of the central allocation mechanisms and the redistribution of property rights, post – Soviet enterprises adopted survival strategies, largely determined by the persistence of structural and cultural characteristics pertaining to the previous regime. At the internal level, the attempt to maintain the directorate’s power lead to the emergence of managerial strategies based on a greater autonomy of directors in horizontal negotiations and on the creation of a peculiar paternalistic type coalition between managerial staff and workers during the privatization process. As a consequence, the analysis of structural transformations and managerial strategies for the control of enterprises is essential for the understanding of the main trends in the evolution of social relations in production, which, in turn, determine the organizational changes in the workplace and the human resource management policies.

 

 

Economic integration and foreign investment : Japanese and Korean strategies in Central Europe

by

James Darby, Queen’s University of Belfast

JEL classification : F150, F200, L620

Abstract

In the countries of Central and Eastern Europe the status and performance of the motor manufacturing industry before 1990 reflected the shortcomings of the command economy in its production of consumer goods, both in the nature and quality of the vehicles assembled, and in the manufacturing process itself. Before and after 1990 the demand for passenger cars was considerable. At the same time, the growth of investment by foreign firms, including a number of large-scale vehicle assembly projects, has greatly influenced the process of economic reform. Japanese and Korean projects exemplify two contrasting approaches to the search for economic reform through inward investment. If the hesitancy of the Japanese investor is justified it is likely that Daewoo and similar investors will lose heavily, but if the opposite occurs, the Japanese motor industry will have suffered a setback in its strategy of global development.

 

 

Liberalism, rationality and the transition to capitalism

by

Guglielmo Carchedi, University of Amsterdam

JEL classification : P100, P200

Abstract

Despite the fact that recent historical developments have almost destroyed the credibility of democratic planning in a self-managed economy and society, the problem is to truly democratize the planning of production, distribution and consumption in such a way that everybody will be given equal and maximum opportunities for the unfolding of their human potentiality and all round development. The challenges facing this project are immense. One of the conditions for overcoming them is the realization that privatization, the market, and the capitalist rationality they introduce cannot be conjugated with this project. In its turn, this awareness presupposes that the above mentioned theoretical faults inherent in neo-liberalism be exposed. At the same time, these errors delimit the capitalist’s view of reality which cannot go further than the rationalization of their own interests.