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Partial Privatization and Yardstick Competition: Evidence from Employment Dynamics in Bangladesh

Bhaskar, V and Gupta, Bishnupriya and Khan, Mushtaq (2002) Partial Privatization and Yardstick Competition: Evidence from Employment Dynamics in Bangladesh. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.

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Abstract

We analyze the dynamics public and private sector employment, using the natural experiment provided by the partial privatization of the Bangladeshi jute industry. Although the public sector had substantial excess employment of workers initially, this excess was substantially eroded by the end of the period we study. The extent of such erosion differs between white-collar and manual worker categories, with excess employment persisting only in the former. Our findings are consistent with the idea that the central authorities used yardstick competition to reduce public sector managerial rents. We argue that partial privatization increases the efficacy of yardstick competition in the regulation of public firms, since heterogeneous ownership undermines collusion between public sector managers.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: privatization, yardstick competition, excess employment, collusion
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Users 161 not found.
Date Deposited: 28 Aug 2014 14:56
Last Modified: 28 Aug 2014 14:56
URI: http://repository.essex.ac.uk/id/eprint/8847

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