Enterprise Reform and Privitization in Socialist Economies

This paper reviews attempts of a group of socialist countries to reform their state-owned enterprise (SOE) sectors. It looks briefly at the past performance of SOEs in socialist countries; examines why so many of them are opting for fundamental reform of enterprises including privatization and liquidation; and assesses reform experience to date and future prospects. The analysis is limited to seven socialist countries that are active members of the World Bank group. These seven countries have long tried to improve SOE performance by restructuring -- attempts short of ownership change -- with meager results. The path for, and intensity of, reform varies among the countries reviewed. The common denominator is that these seven governments have recognized the need to go beyond past, partial steps in their attempts to reform SOEs and improve their performance.