Privatization and principal-principal conflicts in transition economies

Although shareholder rights are essential for effective privatization processes, along with other formal institutions they are also weak in transition economies offering a new window to understand the new agency problems centered on principal-principal conflicts. In this chapter, we address principal-principal conflicts in transition economies and specifically explore the role of privatization on firm ownership structure and institutional development. We argue that the heterogeneity in terms of the methods and speed of privatization helps us understand the underlying conditions that contributed to the evolution of concentrated ownership over dispersed structure and also the differences in ownership identities and institutional development across transition economies