TY  - JOUR
AU  - Sinn,Hans-Werner
TI  - Privatization in East Germany
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3998
PY  - 1992
Y2  - February 1992
UR  - http://www.nber.org/papers/w3998
L1  - http://www.nber.org/papers/w3998.pdf
N1  - Author contact info:
Hans-Werner Sinn
Ifo Institute -
Leibniz Institute for Economic Research
at University of Munich
Poschingerstr. 5
81679 Munich
GERMANY
Tel: 49-89-21802748
Fax: 49-89-397303;49-89-8506434 (home)
E-Mail: sinn@ifo.de
AB  - This paper is a critical review of east German privatization policy. It is argued that the restitution of old property rights has been a major obstacle to investment and that the attempt to sell two thirds of an economy in the market place is bound to be a failure. Such an attempt implies serious macro and microeconomic stock-flow problems which erode the sales prices of Treuhand assets, induce the Treuhand to slow down its sales, and reduce private investment. By combining a participation model with a wage freeze the paper designs a social contract that may help increase the chances of economic recovery in east Germany.
ER  -