Transformation of the government's economic governance style is a prerequisite for successful privatization Case study: Banking industry

Abstract

The purpose of this study is to investigate the challenges of privatization of the banking industry and to identify the causes of its inefficiencies in the governance layer. To this end, in the theoretical framework of neo-institutionalist economics, Williamson's four-tier conceptual model became the basis of the analysis. Based on the selected model, the basic assumptions, ideas and goals of the government from the implementation of the privatization program, government policies to reform the institutional environment and government policies to achieve efficient governance structures on the way to market economy, and the results of these policies at the operational level. Both in terms of opinion and in terms of practice, based on content analysis, data related to the implementation of the privatization program were analyzed. The results showed that the roots of the inefficiency of the privatization program should be in the first priority in the fallacies in the basic assumptions and the expected goals of privatization in practice, in the second priority in the failure to fulfill the expected functions of the transfer of ownership in the privatization process. The basis of the expected functions of it, and in the third priority in the government's adherence to the style of economic governance with an acting approach instead of governing with a game-making and regulatory approach on the way from state economy to market economy. The results of these failures in the three layers of economic governance have led to the failure of the price mechanism in the market.

Keywords

• bank privatization
• economic governance style
• multilayered institutional analysis
• market failure
• pricing mechanism