Which Enterprises (Believe They) Have Soft Budgets after Mass Privatization? Evidence from Mongolia

29 Pages Posted: 14 Aug 1997

See all articles by James H. Anderson

James H. Anderson

World Bank - Governance Global Practice

Georges Korsun

Deloitte Touche Tohmatsu - Financial Advisory Services

Peter Murrell

University of Maryland - Department of Economics

Date Written: August 14, 1997

Abstract

To ascertain the degree to which enterprises have soft budgets and to find the causes of softness, we surveyed 251 privatized Mongolian enterprises, asking whether state aid was expected when financial difficulties arose. One-quarter of the enterprises face soft budgets, a large proportion of these having central government ownership. We examine causes of soft budgets other than state ownership, but the state variable dominates. These results are robust to the use of either instrumental variables or of bivariate probit to unmask unmeasured selection effects. Local government ownership has a much weaker effect on whether budgets are soft than does central ownership.

JEL Classification: P11, P21, O53, H70, H20

Suggested Citation

Anderson, James Horton and Korsun, Georges and Murrell, Peter, Which Enterprises (Believe They) Have Soft Budgets after Mass Privatization? Evidence from Mongolia (August 14, 1997). Available at SSRN: https://ssrn.com/abstract=42387 or http://dx.doi.org/10.2139/ssrn.42387

James Horton Anderson

World Bank - Governance Global Practice ( email )

1818 H. Street, N.W.
MSN J 4-403
Washington, DC 20433
United States
202-458-1556 (Phone)

HOME PAGE: http://blogs.worldbank.org/team/jim-anderson

Georges Korsun

Deloitte Touche Tohmatsu - Financial Advisory Services ( email )

2 World Financial Center
New York, NY 10281
United States
212-436-5981 (Phone)
212-653-3776 (Fax)

HOME PAGE: http://www.deloitte.com/us/economics-statistics

Peter Murrell (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3476 (Phone)
301-405-3542 (Fax)

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