OED Background Paper the World Bank, Privatization and Enterprise
OED Background paper The World Bank, Privatization and Enterprise Reform in Transition Economies: A Retrospective Analysis by John Nellis* Center for Global Development Washington, D. C. *Staff member in the World Bank from 1984 to 2000. Harry Broadman, Simeon Djankov, Bernard Drum, Oleh Havrylyshyn, Janos Kornai, Lars Jeurling, Michael Lav, Peter Murrell, Roberto Rocha and Herbert Schmidt offered comments on a first draft that led to changes. Alex Kuo prepared the bibliography. Remaining errors are the author’s. 2 I Introduction The Operations Evaluation Department (OED) of the World Bank commissioned this analysis. Unlike the typical OED study, it does not analyze the specific details of any particular Bank project or set of projects. Rather, it offers a conceptual account of the approach to privatization and enterprise reform of three major countries in the transition region. It discusses for each the states of mind concerning enterprise reform and privatization that prevailed in the country and the World Bank at various places and moments prior to and in the transition process, the initial conditions faced by reformers and those who assisted them, and the policy frameworks that evolved. In each of the three chosen cases restructuring and privatization were seen as critical by reformers, their Western academic and financial advisors, and Bank and other international financial institution’s (IFI) staff. In each case the debates on the privatization issue raised questions of importance beyond the single country. The intent is to complement the more traditional and detailed OED review of projects, by illustrating the major problems and issues faced, the solutions proposed, their evolution over time, and the policy paths rejected or missed by Bank staff, and reformers in the transition governments, concerning the contentious topic of privatization.
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