Chapter

How do Governments Privatize?

BERNARDO BORTOLOTTI DOMENICO SINISCALCO

in The Challenges of Privatization

Published in print March 2004 | ISBN: 9780199249343
Published online April 2004 | e-ISBN: 9780191600845 | DOI: http://dx.doi.org/10.1093/0199249342.003.0005
 How do Governments Privatize?

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When designing a divestiture program, governments typically pursue different – and sometimes conflicting – objectives. The main goals are the following: revenue maximization, share ownership diffusion, the promotion of popular capitalism, investors’ confidence building and financial market development. This chapter tries to explain how a given method can be functional to achieve specific goals, pointing out the possible trade-offs that any choice involves. Suitable privatization design is the key to solving these difficult trade-offs.

Keywords: credibility; cross-listings; market liquidity; popular capitalism; public offers of shares; stock market development; underpricing

Chapter.  6301 words.  Illustrated.

Subjects: Financial Markets

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