State ownership - reasons in principle and dilemmas in practice

One dominant idea in the 1990s was extension of private ownership, including transfer of state assets into private hands, was a cornerstone of the economic change of system in Central and Eastern Europe. So economists and politicians in recent years were concerned mainly to justify privatizing state-owned firms. Now the endgame - sales of remaining assets and in some cases revision of unsuccessful transactions - has brought back into the crossfire of political contention some basic theoretical issues debated at the beginning of privatization. Does it matter at all who the owner is? What can justify maintaining and extending state ownership? Can the state operate as a better owner in a market economy than it can in a planned economy? With almost 15 years' experience of market economic transformation behind us, it becomes possible to examine the validity of theories in the light of practice.