Roman Frydman

Corporate governance and the political effects of privatisation

In looking back at the experience of privatisation in the transition economies of Eastern Europe, it becomes evident that the early thinking concerning the very role of privatisation needs to be revisited. The assumption underlying much of that thinking was that firms in the state sector, presumably holding a large stock of valuable assets, would continue to play a key role in the future of post-communist economies. As a result, thorough reform of the state enterprise sector, of which privatisation was to be the core element, was a prerequisite of further economic growth.