Property Rights

1. What impact will the prospect of deprivatization have on investment by managers of privatized firms

In this case the managers of privatized firms will not have the same power and will not longer make their own decisions. The decisions will be made by politicians and could affect in the decision making because of the timing, it will take too long to makes decisions and this could affect.

The impact will affect the strategies, the profits, the corporate focus. The managers of a deprivatization firm will only meet his superior requirements. Additional investments will be a high risk in terms of political views and payback. If deprivatization is forced private owners will loose their investments.

2.What effect will deprivatization have on foreign investment in Russia?

The effect of deprivatization on foreign investment in Russia will decrease because the companies will leave, the direct investment will prefer to invest in other regions. It has advantages like it will pay taxes, will increases job opportunities, will stimulates economics growth. These advantages will no be realized if in the future less foreign direct investment will decline. Private business owned by foreign will be perfect targets because the profits coming from them could be transferred back to the investors.

3. Who gains from deprivatization?

Who loses?

Just a few will gain from deprivatization , these will include but not limited to anyone who endorses the deprivatization for his own goals: the investors, the government . The politicians will abuse their power to increase their profits.

In the other hand a lot more will loose like the consumers, the local economy, the quality of the product, the foreign investors.

4. Assuming more people are hurt by deprivatization than helped, why would a local politician support such a policy?

Politicians will support this policy because they will look for their local investors. Their power is required to safeguard state property and will not transfer property to individuals , this way politicians may want to increase government popularity by safeguarding public property by deprivatization. If the government acquires the public owned firms it will be possible for them to further economic and social goals in the whole nation. Politicians may believe that having a controlled economy or a segment of the economy will benefit