Does a Change in the Ownership of Firms, From Public to Private, Make a Difference?

The economic impact of privatisation is hard to assess, the author states. This paper extends the analysis of Florio (2004) in four directions. It argues that a welfare assessment of privatisation must include an evaluation of the performance of public enterprises in light of their originally broad set of objectives including, for example, the promotion of employment. It highlights the importance of financial pressure, independently of privatisation, in improving the performance of public firms.