Privatization in Poland: A Property Rights Approach

Privatization has become a frequently used instrument of public policy in numerous countries. However, depending on the main objective of privatization, different privatization strategies should be applied. Since Socialist Economies in Transition (SET), such as Poland, are currently trying to increase the efficiency of the entire economy through the implementation of Western-type market economies, private ownership becomes a constitutional element. On the one hand, the existence of national ownership, which shows some characteristics of non-ownership, is closely related to the failure of socialism. On the other hand, the absence of clearly specified property rights is detrimental to the privatization process as such since individual claimants of property rights are entering into a bargaining process. This can possibly paralyze the actual transfer of national ownership to the private sector. Hence, it is necessary to clearly specify the property rights both to increase overall efficiency and as a prerequisite for rapid ownership changes.