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There are now over 125 empirical papers that analyze the process of enterprise restructuring in transition

Financial markets appear to improve the allocation of capital. Across 65 countries, those with developed financial sectors increase investment more in their growing industries, and decrease investment more in their declining industries, than those with undeveloped financial sectors. The efficiency of capital allocation is negatively correlated with the extent of state ownership in the economy, positively correlated with the amount of firm-specific information in domestic stock returns, and positively correlated with the legal protection of minority investors. In particular, strong minority investor rights appear to curb overinvestment in declining industries.

While most countries are committed to increasing access to safe water and thereby reducing child mortality, there is little consensus on how to actually improve water services. One important proposal under discussion is whether to privatize water provision. In the 1990s Argentina embarked on one of the largest privatization campaigns in the world, including the privatization of local water companies covering approximately 30 percent of the country's municipalities. Using the variation in ownership of water provision across time and space generated by the privatization process, we find that child mortality fell 8 percent in the areas that privatized their water services and that the effect was largest (26 percent) in the poorest areas. We check the robustness of these estimates using cause-specific mortality. While privatization is associated with significant reductions in deaths from infectious and parasitic diseases, it is uncorrelated with deaths from causes unrelated to water conditions. This paper has benefited from comments by

Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur. We derive conditions under which completely selfinterested entrepreneurs opt for not-for-profit status, despite the fact that this status limits their ability to enjoy the profits of their enterprises. We also show that even in the absence of tax advantages, unrestricted donations would flow to non-profits rather than for-profit firms because donations have more significant influence on the decisions of the non-profits. 1 Earlier work on non-profit firms includes Arrow (1963) and Nelson and Krashinsky (1973).

Business of the University of Chicago for financial support. Financial Reporting Incentives for Conservative Accounting:

This is a survey of the field of economic analysis of law, focusing on the work of economists. The survey covers the three central areas of civil law — liability for accidents (tort law), property law, and contracts — as well as the litigation process and public enforcement of

The issue of public versus private ownership turns on three questions: (1) does competition matter more than ownership? (2) are state enterprises are more subject to welfare reducing interventions by government than are private firms? And (3) do state enterprises suffer more from corporate governance problems than private firms? Even if the answers to these questions favors private ownership, we must still ask whether distortions in the process of privatization mean that privatized firms perform worse than state enterprises. Our review found greater ambiguity about the merits of private ownership and privatization in theory than in the empirical literature. Empirical research comparing private or privatized firms with a state owned counterfactual documented gains in most cases. JEL Codes: L32 Public Enterprises; L33 Boundaries of Public and Private Enterprise; Privatization; Contracting Out; D21 Firm Behavior; D23 Organizational Behavior; Transactions Costs; Property Rights; 3 1.

In recent years, comparative economics experienced a revival, with a new focus on comparing capitalist economies. The theme of the new research is that institutions exert a profound influence on economic development. We argue that, to understand capitalist institutions, one needs to understand the basic tradeoff between the costs of disorder and those of dictatorship. We then apply this logic to study the structure of efficient institutions, the consequences of colonial transplantation, and the politics of institutional choice.

There has been a dramatic change in the division of responsibility between the state and the private sector for the delivery of public goods and services in recent years with an increasing trend toward contracting out to the private sector and “public-private partnerships. ” This paper analyzes how ownership matters in public good provision. We show that if contracts are incomplete then the owner-ship of a public good should lie with a party that values the benets generated by it relatively more. This is true regardless of whether this party is also the key investor, or other aspects of the technology. I.