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When will privatization maximize the government's net revenues?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Taylor, Leon |
| Copyright Year | 2016 |
| Abstract | Governments often sell assets for revenues or economic efficiency. When the capital is durable, potential buyers may wait for the government to cut its price, since they know that as a monopoly it will initially price above marginal cost. Rather than sell, the government could continue to lease the capital to the public – that is, to sell the services that the capital generates, in exchange for a tax payment. Comparative statics indicate that a government maximizing its net revenues may prefer leasing to selling for a large inventory of capital-intensive products that buyers view as vital. For example, a socialist government contemplating a transition to markets must consider the impact on its own revenues. If its major assets are capital-intensive, the impact may be negative. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://mpra.ub.uni-muenchen.de/69589/1/MPRA_paper_69589.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
