Social Security and Medicare: no free lunch
Postal savings in Japan and mortgage markets in the U.S.
Financial system redesign has become high political drama in Japan. In August, 2005, Prime Minister Koizumi's plan to privatize Japan's huge postal savings and life insurance system (PSS) was defeated in the Lower House of the Diet. Koizumi then retaliated by dissolving the Lower House and calling a "snap" election for September 11, 2005 in hopes of getting members of the Liberal Democratic Party (LDP) more supportive of his program into the legislature. This was essentially a showdown?an open confrontation between the "new" and the "old" LDP in an effort by Koizumi to reduce the ...
Political and economic consequences of alternative privatization strategies
The different approaches to large-scale privatization in Hungary, Poland, and the Czech Republic imply somewhat different patterns of corporate governance--that is, ownership, monitoring, and control of firms. Corporate governance affects economic incentives within the firm, and therefore economic performance of the firm. Similarly, patterns of ownership implied by the programs affect the distribution of gains from reform. Privatizing the large enterprises will importantly influence resource allocation, employment, and output. Consequently, the patterns of corporate governance embodied in the ...
The effects of social security privatization on household saving: evidence from the Chilean experience
In recent years, a handful of countries have converted the financing of their social security systems from pay-as-you-go (PAYGO) to partial or full funding. Privatization is viewed as one way to insulate social security from the political and demographic pressures that currently threaten the financial stability of PAYGO systems. However, privatization would improve a nation's situation only if such a reform increases domestic saving. In this paper I use evidence from Chile, where social security was privatized in 1981, to assess the impact of such a reform on household saving rates. I find ...
Review essay on \\"Privatopia\\" and the Public Good by Evan McKenzie, 1994
In Privatopia, Evan McKenzie documents the history and legal structure of common interest developments, a form of residential community organization. McKenzie also looks at possible explanations for the rising popularity of these organizations despite the fact that their governing associations may impose more onerous restrictions on residents' behavior than municipal governments do. In this essay, the reviewer discusses McKenzie's explanations and adds his own based on an appreciation of the underlying economic forces that have shaped these types of communities. The reviewer concludes that ...
Examining social security privatization in Latin America
Privatization of local public services: lessons for New England
As governments consider ways to provide public services more efficiently, privatization can seem like an attractive option. Yet the subject engenders sharp controversies. In New England, local governments generally have not engaged in as much privatization as those in other parts of the country. ; This article examines the evidence on the relative merits of privatizing public services and attempts to determine whether these costs and benefits actually appear to explain local government behavior throughout the United States. The limited scope of privatization by New England local governments ...
Fiscal pressures and the privatization of local services
The privatization movement appears to have lost some momentum in the United States over the 1990s. Although local governments continue to look for ways to deliver services more efficiently by using private contractors, the pace at which they are issuing contracts has slowed. In part, the trends may reflect political realities. Public employees naturally are concerned about losing their jobs, and they constitute a sizable share of the electorate. The limited role of outside contractors may also reflect economic pragmatism, especially in the face of greater scrutiny of past efforts to privatize ...
Privatization and the transition to a market economy
The Chinese government has announced its intention to privatize thousands of state-owned enterprises. Such an effort would dwarf recent privatizations in the industrialized West and be comparable only to the Eastern European experience following the fall of the Soviet Union. As such, an examination of the Eastern European privatization may provide valuable lessons for China and any other developing economy that embarks upon a large-scale privatization program. In this article, Jason Saving considers three problems with which Eastern European privatizations have had to contend: a scarcity of ...