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Shock Privatization: The Effects of Rapid Large-Scale Privatization on Enterprise Restructuring

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  • Lawrence King

Abstract

The neoliberal-inspired “shock therapy†policies were designed to allow efficiency considerations to shape the new capitalist economies. Most experts theorized that these policies would enable postcommunist countries to close the gap with the West. After more than a decade, this prediction has been falsified. Fieldwork in 25 Russian firms demonstrates that the neoliberal prescription of mass privatization creates shocks that make successful enterprise restructuring almost impossible. Instead, most firms lower their technological level of production and retreat to nonmarket activity to survive. The result is a poorer economy with less growth potential and thus increased divergence with the West.

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  • Lawrence King, 2003. "Shock Privatization: The Effects of Rapid Large-Scale Privatization on Enterprise Restructuring," Politics & Society, , vol. 31(1), pages 3-30, March.
    • Handle: RePEc:sae:polsoc:v:31:y:2003:i:1:p:3-30
    DOI: 10.1177/0032329202250157
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    Cited by:

    1. Ichiro Iwasaki, 2007. "Enterprise Reform And Corporate Governance In Russia: A Quantitative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 21(5), pages 849-902, December.
    2. King, Lawrence P., 2007. "Does neoliberalism work? Comparing economic and sociological explanations of postcommunist performance," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 8(2), pages 10-17.
    3. Szelenyi, Ivan, 2010. "The New Grand Bourgeoisie under Post-Communism: Central Europe, Russia and China Compared," WIDER Working Paper Series 063, World Institute for Development Economic Research (UNU-WIDER).
    4. Patrick Hamm & David Stuckler & Lawrence King, 2006. "Mass Privatization and the Postcommunist Mortality Crisis," Working Papers wp118, Political Economy Research Institute, University of Massachusetts at Amherst.
    5. Ivan Szelenyi, 2010. "The New Grand Bourgeoisie under Post-Communism: Central Europe, Russia and China Compared," WIDER Working Paper Series wp-2010-063, World Institute for Development Economic Research (UNU-WIDER).
    6. Patrick Hamm & David Stuckler & Lawrence King, 2010. "The Governance Grenade: Mass Privatization, State Capacity and Economic Growth in Post-communist Countries," Working Papers wp222, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. Quaglio, GianLuca & Karapiperis, Theodoros & Van Woensel, Lieve & Arnold, Elleke & McDaid, David, 2013. "Austerity and health in Europe," Health Policy, Elsevier, vol. 113(1), pages 13-19.
    8. Lawrence P. King, 2003. "Explaining Postcommunist Economic Performance," William Davidson Institute Working Papers Series 2003-559, William Davidson Institute at the University of Michigan.

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