Finding Real Owners-Lessons from Estonia's Privatization Program
Author: John Nellis Date: 1/1/1996 (PDF, 200KB)
The Estonian government has privatized more than 90 percent of its industrial and manufacturing enterprises. John Nellis explains that, unlike most countries in Eastern Europe and the former Soviet Union, Estonia has avoided selling its state-owned enterprises into the control of insiders--workers and managers in the firm or financial institutions tied to the state. Instead, the Estonians have used a modified version of the German Treuhandanstalt's group tender method, which helps to ensure that privatized firms have real owners serious about creating a productive and enduring business and willing to pay a meaningful price.