Cost—benefit analysis and assessing privatisation projects in transitional economies

Abstract

In many transitional economies, privatisation is a strategic non-marginal activity that involves a dramatic shift in policy. Cost—benefit calculations are at the very least an important tool for formalising questions about privatisation policy. They should shed light on issues such as alternative modes of privatisation, including the reformed state sector option, and the magnitude of the gains to different groups. When foreign investors are involved, they allow the critical distinction to be made between the return to investment in a project and the return to the national economy.

Keywords:

• cost—benefit analysis
• privatisation
• transitional economies