Factor Efficiency in Pakistan Industry: The Influence of Private Versus Public Ownership in Affecting Capital and Labor Productivity

摘要

Pakistan's recent fascination with privatization stems from two sources: external and internal. External influences are largely associated with the increased role of the International Monetary Fund in the country's policy making decision process. Internal pressures for privatization are from three main sources. First concerns the fiscal situation. Government deficits have been a growing problem in recent years and the conventional wisdom has been that in large part these deficits have stemmed from losses accrued by public enterprises. As a result, the perception has developed that a privatization program may go some way to relieving fiscal pressure. The second source of internal pressure concerns ideology with respect to the role of the state. The emphasis of economic thinking in the late 1980s was on issues such as government failure and the power of the market. In such an ideological environment, the inclination of advisers is to roll back the power of the state and privatization is seen by some as the tool to achieve that objective. This view also gains some support from elements in the current theological debate about what an Islamic economic system should look like. The third source of pressure comes from the business community who sense the opportunity of making a financial killing on the transaction.