The privatization of large state-owned enterprises is one of the most radical policy developments of the last quarter century. Right-wing governments have privatized in an effort to decrease the size of government, while left-wing governments have privatized either to compensate for the failures...

We review theoretical work studying the effect of soft budget constraints (SBC) on economies in transition from centralization to capitalism. We also examine the connection of SBC to corporate finance, banking, and financial crises