An evaluation of some key ideas on privatisation in Kenya

Abstract

Experience of various economies has shown that privatisation is likely to be slow, and drawn out process rather that swift and all encompassing big bang, or mass privatisation. Therefore, the issue of sequencing i privatisation acquires policy importance. An efficiency-based logic which priorities privatisation of enterprises likely to post largest improvements in performance, can help reduce investor uncertainty, and enhance state credibility by indicating the presence of a government in control of the process. The introduction of necessary regulations in sectors that are monopolistic is more likely to be undertaken in the short-tun.Otherwise, the absence of regulations can lead to market failures. Thus, along with privatisation and changes in competition policy changes in regulatory policies are equally necessary and important aspects of the reform process leading to changes in the behaviour and performance of firm.