Abstract
This chapter analyzes the effect of domestic lobbying on the optimal degree of privatization and social surplus in a closed mixed oligopoly model and an extended two-country model. We find that lobbying activity leads to overprivatization in a closed economy and may improve social welfare in a two-country economy. When each country’s benevolent government determines the optimal privatization level, the privatization level always leads to underprivatization. This means an open trade policy leads to underprivatization. However, our results show that overprivatization may also exist in an open economy.
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Shinozaki, T., Mazza, I., Kunizaki, M. (2017). Political Economic Analysis of Privatization. In: Yanagihara, M., Kunizaki, M. (eds) The Theory of Mixed Oligopoly. New Frontiers in Regional Science: Asian Perspectives, vol 14. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55633-6_8
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DOI: https://doi.org/10.1007/978-4-431-55633-6_8
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