Re: state's refusal to sell

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

The reasons why States do not commonly sell their businesses to employees are:
1. Sales to "trade" investors yield higher prices.
2. If no trade investor, then sales to private syndicates of institutions
can save the cost of an IPO
3. If no trade investor or private syndicate, an IPO can raise more money
without perceptions of government exploiting employees with a too higher
price to them.
4. It is more complicated and slower to sell to employees and now the
Russian experience frightens off bureaucrats.
5. The politics of envy.  One set of bureaucrats do not want to see another
set do better than them.
6. Bureaucrats have little knowledge or confidence on how to structure
employee ownership which requires a division of power and checks and
balances to be competitive and sustainable as outlined in my article
"Employee governance" in the COG library.

Regards

Shann

At 08:25 AM 23/3/2000 , you wrote:
>I am trying to compile a list of reasons why the state
>would NOT want to sell a government owned enterprise or
>service to the employees, assuming it was planning to
>privatize the operation anyway. Do you have any ideas?
>
>Thanks.
>
>
>--
>Dan Bell
>International Program Coordinator
>Ohio Employee Ownership Center
>Kent State University
>Kent, OH 44242
>(330) 672-3028
>(330) 672-4063 fax
>dbell@kent.edu
>http://www.kent.edu/oeoc/
>http://cog.kent.edu

Shann Turnbull
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