Booth & Niemietz: Growing the UK Pension Pot – The Case for Privatization

From the Summary:

The system of contracting out of state pensions – a form of pension privatisation – operated very successfully in the UK until recent years with cross-party support. This was very important in ensuring that the UK system of private pension provision was one of the most successful in the Western world. This paper proposes reviving the concept of voluntary pension privatisation through contracting out using the proposed reformed UK pension system that will be introduced from 2016.

Under the proposals, individuals would receive rebates of national insurance contributions equal to the fair actuarial value of the pension that they will forego as a result of opting out of half the state pension. The rebates will be paid to somebody contracting out regardless of whether that individual pays sufficient cash national insurance contributions: the rebates are designed to reflect the actuarial value of the pension foregone. They will vary with age and be available to low earners and those who are receiving state pension entitlement as a result of undertaking caring responsibilities. Such people will be able to build up considerable pension assets in their own right. In the context of widespread discussion about the inequalities arising from returns on capital being higher than economic growth, this might be regarded as especially important. Currently, large numbers of people are discouraged from accumulating capital because the main objectives of saving are fulfilled by the state pension schemes.

 

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Khajar: Model of State-Owned Enterprise (SOEs) Privitization Through New COmmon Stock and Its Implication Towards Financial Performance Period 2005-2012

ABSTRACT:

Megginson, Nash, and Randenborgh, 1994 confirmed that there had been an improved financial performance. The performance of State-owned enterprise (SOEs) was influenced by the basic model of privatization. This research was intended to acknowledge and analyze; how was the model of privatization of State-Owned Enterprises (SOEs) in Indonesia?; what was the new common stock or divestment?; how was the price of stock of IPO in SOEs in Indonesia?; What were over-value or under-value?; and how was the financial performance (return on sales, return on equity) of SOEs in Indonesia pre-privatization and post – privatization? The research employed paired sample T Tes of statistic analysis. It aimed to seek for the difference of the financial performance pre-privatization and post-privatization. The research showed that (1) All SOEs were privatized by issuing new stock; (2) four privatized SOEs experienced under-value, and the other one had over-value; (3) two SOEs had better financial performance at post-privatization compared to pre-privatization.

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Sedighikamal & Talebnia: A Review of Privatization in Iran

ABSTRACT:

Privatization has become a popular panacea for solving the organizational problems of governments by reducing the role of the state and encouraging the growth of the private sector enterprises. However, privatization takes a number of forms and has been approached in various ways during the move away from state control to other forms of ownership in developing and industrialized countries. Based on Iranian constitution, No.144, public companies must change to the private companies. The government of Iran urgently needs expanded and more dynamic private sectors, more efficient and effective
infrastructure/utility provision, and increased investment from both domestic and foreign sources. The most important purpose of privatization in Iran is increasing the proficiency. In this article we will discuss about the reasons of this policy, forms and trends, privatization process and volume will be surveyed, article 44 and at the end performance of the government on privatization will be explained.

 

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Goyal, Jategaonkar, Megginson & Muckley: Whence the privatized firm dividend premium?

ABSTRACT:

We find that the major determinants of the payout premium of firms after privatization are improved firm operating performance and a prevalence of agency costs which are mitigated by higher pay outs. We examine up to 82,612 firm-years (up to 409 privatized and 6,193 non-privatized firms) across 26 countries. The privatized firm payout premium increases substantively in civil law countries and is inversely related to the proportion of closely held shares. It also increases with firm earnings, efficiency and growth opportunities. Our main findings do not materially differ in respect to the international variation over time of the dividend tax penalty and across the state of economic development in the country of firm privatization but they are not evident in industry sectors with high levels of regulation. We therefore provide an economic rationale for the higher pay outs of privatized firms.

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Bucher-Koenen & Lamla: The Long Shadow of Socialism: On East-West German Differences in Financial Literacy

ABSTRACT:

We use the German reunification as a natural experiment to understand drivers of financial literacy accumulation. With the transformation from a planned to a market-based economy in 1990, the incentives to invest in financial literacy were changed exogenously for East Germans and remained the same for West Germans. Our results show that even 20 years after reunification there is evidence for a significant financial literacy gap between East and West. While some groups, for instance women and those who have migrated from the East to the West, show similar levels of financial literacy compared with their West German peers, others do not. Differences in financial literacy are present across all educational groups and at the top and the bottom of the income distribution. We decompose the financial literacy gap taking account of factors commonly integrated in theoretical models of financial literacy. Most of the gap remains unexplained. Extending empirical and theoretical models by including differences in attitudes and values might improve our understanding of financial literacy acquisition.

 

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Radygin & Entov: The Fundamental Privatization Theorem – Ideology, Evolution, Practice

ABSTRACT:

The article focuses on the analysis of the evolution of contemporary theoretic approaches to the choice of an optimal form of ownership, and the corresponding estimation of privatization in the context of the advantages and disadvantages of the public and private sectors of the national economy. Various interpretations of the fundamental privatization theorem are considered: based on the principal-agent relationship; based on the comparison of the structure of information flows; the combination of ownership rights and contractual rights; consideration of sociopolitical factors, etc. The latest trends in Russia’s de-statization policy in 2010-2013 are analyzed in the context of ‘reluctant privatization’, with special emphasis on the asymmetry between the statization and privatization processes.

 

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